EXHIBIT  13(C)

     HARLEYSVILLE  GROUP
     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     INTEREST  RATE  RISK

     Harleysville  Group's exposure to market risk for changes in interest rates
is  concentrated in its' investment portfolio and, to a lesser extent, its' debt
obligations.  Harleysville Group monitors this exposure through periodic reviews
of  asset  and  liability  positions.  Estimates of cash flows and the impact of
interest  rate  fluctuations  relating  to  the investment portfolio are modeled
regularly.

     Principal  cash  flows  and  related  weighted-average  interest  rates  by
expected  maturity  dates  for financial instruments sensitive to interest rates
are  as  follows:


<TABLE>
<CAPTION>
                                     DECEMBER  31,  2001
                             -----------------------------------
                                PRINCIPAL       WEIGHTED-AVERAGE
                               CASH FLOWS       INTEREST RATE
                             --------------     ----------------
                          (dollars in thousands)

<S>                          <C>                    <C>
Fixed maturities and short-
   term investments:
     2002                    $  145,974             5.36%
     2003                       189,772             6.01%
     2004                       106,301             6.32%
     2005                       141,196             6.46%
     2006                       181,670             5.65%
     Thereafter                 670,721             5.95%
                             ----------

   Total                     $1,435,634
                             ==========

   Fair value                $1,480,547
                             ==========

Debt
     2002                    $      435             2.20%
     2003                        75,475             6.72%
     2004                           520             2.20%
     2005                        19,065             2.62%
     2006                           560             2.20%
                             ----------
   Total                     $   96,055
                             ==========

   Fair value                $   97,443
                             ==========
</TABLE>


     Actual  cash  flows  may  differ from those stated as a result of calls and
prepayments.

Page  16

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     HARLEYSVILLE  GROUP

     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
     (Continued)

EQUITY  PRICE  RISK

     Harleysville  Group's  portfolio  of equity securities, which is carried on
the  balance  sheet  at  fair  value, has exposure to price risk.  Price risk is
defined  as the potential loss in fair value resulting from an adverse change in
prices.  Portfolio  characteristics  are  analyzed  regularly and market risk is
actively  managed through a variety of techniques.  The portfolio is diversified
across industries, and concentrations in any one company or industry are limited
by  parameters  established  by  senior  management.

     The  combined  total of realized and unrealized equity investment gains and
(losses)  was  $(35.9)  million, $(12.2) million and $27.8 million in 2001, 2000
and  1999,  respectively.  During  these  three  years, the largest total equity
investment  gain  and (loss) in a quarter was $22.9 million and $(27.6) million,
respectively.

Page  17

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