Harleysville Group and Harleysville Mutual Insurance have amended their intercompany pooling agreement as it relates to their workers compensation business, to improve capital efficiency across the organization.
Effective 1 January 2011, the amendment establishes that the financial results associated with workers compensation business for accident years 2011 and following will be retained 100% by Harleysville Mutual.
At the same time, the financial results of prior accident years will continue to be shared between Harleysville Group and Harleysville Mutual under the existing pool participations, according to the Harleysville.
As a result of this amendment, Harleysville Group insurance subsidiaries will transfer cash and investments to Harleysville Mutual approximately $33m related to the transfer of the unearned premium liability on the workers compensation business as of 1 January 2011.
Through nine months of 2010, Harleysville Group had $58.6m in workers compensation net written premiums and an accident year combined ratio of 117.3%.
Harleysville Group president and CEO Michael Browne said this modification of pooling agreement does not impact the appetite for workers compensation business, it does not indicate any change in underwriting or claims strategy, and because it is tied to the intercompany reinsurance mechanism of the pooling agreement it has no bearing on how we write or issue individual workers compensation policies.
We believe this pooling change is a sound strategic move for our organization,” Browne said.