S&P affirms Harleysville

Standard & Poor's said it affirmed its BBB- counterparty credit rating on Harleysville Group Inc.

At the same time, the agency said it assigned A- financial strength ratings to Harleysville Insurance Co., Harleysville Mutual Insurance Co., Harleysville Insurance Co. of NJ, Harleysville Preferred Insurance Co., Harleysville Worcester Insurance Co., Harleysville Lake States Insurance Co., Harleysville Pennland Insurance Co., Harleysville-Atlantic Insurance Co., Harleysville Insurance Co. of New York, Harleysville Insurance Co. of Ohio, and Mainland Insurance Co.

The outlook is stable.

S&P said that the ratings reflect the group's strong competitive position in the small regional property/casualty insurance market, very strong capital adequacy, improved loss reserves, good operating performance, and strong financial flexibility.

Slightly mitigating these favorable rating factors are the group's high expense ratio compared with that of its peers, geographic concentration in the Northeast, and reduced near-term profit margin because of the soft pricing cycle, the agency added.

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