Pennsylvania-based Harleysville Group Inc. is increasing loss reserves for prior accident years by $42 million pre-tax, or $0.92 per share after tax, in the fourth quarter of 2003, reflecting reserve increases primarily in four business lines.
As a result, the company will report a diluted net loss per share in the range of $0.64 to $0.68 in the fourth quarter of 2003 and a diluted net loss per share in the range of $1.57 to $1.61 for the full year 2003. There were essentially no realized investment gains or losses in the fourth quarter of 2003. The company had diluted net income of $0.57 per share in the fourth quarter of 2002, which included realized investment gains of $0.04 per share, and diluted net income of $1.53 per share in 2002. For the full year, 2003 results included realized investment losses of $0.02 per share, compared to $0.39 per share of realized losses in 2002.
The fourth quarter 2003 estimate reflects additions to the company’s loss and loss adjustment reserves for prior accident years, primarily in its workers compensation, commercial automobile liability, commercial multi-peril and personal automobile liability lines of business. The company stated that about two-thirds of the reserve development relates to the 1999 through 2001 accident years.
Harleysville Group will release its fourth quarter and full year 2003 results on Tuesday, Feb. 17, prior to the start of regular trading on the Nasdaq Stock Market.
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