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