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  • Quarterly earnings of $1.12 per share
  • Quarterly net income from operations1 of $0.31 per share
  • Quarterly GAAP combined ratio of 99.7
  • Return on equity of 7.5%
  • Book value per share of $20.67

COLUMBUS, Ohio–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24STFC&src=ctag” target=”_blank”gt;$STFClt;/agt; lt;a href=”https://twitter.com/hashtag/STFC?src=hash” target=”_blank”gt;#STFClt;/agt;–State Auto Financial Corporation (NASDAQ:STFC) today reported first
quarter 2019 net income of $49.4 million, or $1.12 per diluted share,
compared to a net loss of $2.1 million, or $0.05 per diluted share, for
the same 2018 period. Net earnings from operations1 per
diluted share for the first three months of 2019 was $0.31 versus $0.17
for the same 2018 period.

GAAP Operating Results

STFC’s GAAP combined ratio for the first three months of 2019 was 99.7
compared to 102.6 for the same 2018 period. Catastrophe losses for the
first three months of 2019 accounted for 5.9 points of the 64.2 total
loss ratio points, or $17.7 million, versus 3.1 points of the total 67.4
loss ratio points, or $9.8 million, for the same period in 2018.
Non-catastrophe losses and ALAE for the first three months of 2019
included 6.9 points of favorable development relating to prior years, or
$20.9 million, versus 5.1 points of favorable development, or $16.0
million, for the same period in 2018.

SAP Personal and Commercial Operating Results

The exit from our specialty insurance business resulted in the
elimination of specialty insurance as a reportable segment as it no
longer is material to our results. Specialty results, labeled as
“specialty run-off,” are included in the SAP Insurance Segment Results
table below to enable reconciliation to total underwriting results.

Net written premium for the first three months of 2019 increased 4.7%
compared to the same period in 2018. Net written premium for the
personal and commercial segments increased 11.6% and 5.9%, respectively.
The increase in the personal segment was primarily due to (i) rate
actions taken to improve the profitability in personal auto partially
offset by lower retention, and (ii) new business growth and a higher
level of homeowners policies in force. The increase in the commercial
segment was led by new business growth in commercial auto and middle
market commercial. The improvements were partially offset by a decrease
in net written premiums in workers’ compensation due to continued
intense competition in this market.

The SAP personal and commercial segments’ combined ratio2 for
the first quarter 2019 was 99.7 compared to 101.4 for the same 2018
period. Catastrophe losses during the first quarter 2019 accounted for
5.8 points of the total 63.6 loss ratio points, or $17.2 million, versus
3.7 points of the total 66.5 loss ratio points, or $9.8 million, for the
same period in 2018. Non-catastrophe losses and ALAE during the first
quarter 2019 included 7.4 points of favorable development relating to
prior years, or $22.2 million, versus 6.0 points of favorable
development, or $16.3 million, for the same period in 2018.

Book Value and Return on Equity

STFC’s book value increased to $20.67 per share as of March 31, 2019,
compared to $18.91 on December 31, 2018. This was driven by increases in
the market value of our investment portfolio and net income from
operations.

Return on stockholders’ equity for the 12 months ended March 31, 2019,
was 7.5% compared to (1.1)% for the 12 months ended March 31, 2018.

STFC’s Chairman, President and CEO Mike LaRocco commented on the quarter
as follows:

“We once again delivered profitable growth during first quarter 2019,
following our strong 2018 results. The personal and commercial segments’
combined ratio for the first quarter was 99.7, a 1.7-point improvement
over first quarter 2018, largely driven by personal auto, small
commercial package and workers compensation. Our go forward lines
delivered a 9.2% increase in net written premium. Our distribution
partners clearly see the value in our products and platform and are
responding.

“This was a solid start to 2019. The trends we’re seeing in both growth
and losses are positive, and our focused improvements in pricing and
claim handling are producing results. We’re delivering innovative
approaches to every aspect of our business. Our smart home product is
now live in nine states, and we made significant progress toward
launching a pilot program to make the property inspection process easier
for our customers, and more efficient. Our use of robotic process
automation is getting attention and gathering steam, with more than 50
bots now in production.

“State Auto is a different company than it was just four years ago. Now
a customer-focused organization that’s an insurance technology leader –
and growing profitably.”

About State Auto Financial Corporation

State Auto Financial Corporation, headquartered in Columbus, Ohio, is a
super regional property and casualty insurance holding company and is
proud to be a Trusted Choice® company partner. STFC stock is traded on
the NASDAQ Global Select Market, which represents the top fourth of all
NASDAQ listed companies.

The insurance subsidiaries of State Auto Financial Corporation are part
of the State Auto Group. The State Auto Group markets its insurance
products throughout the United States, through independent insurance
agencies. The State Auto Group is rated A- (Excellent) by the A.M. Best
Company and includes State Automobile Mutual, State Auto Property &
Casualty, State Auto Ohio, State Auto Wisconsin, Milbank, Meridian
Security, Patrons Mutual, Rockhill Insurance, Plaza Insurance, American
Compensation and Bloomington Compensation. Additional information on
State Auto Financial Corporation and the State Auto Insurance Companies
can be found online at http://www.StateAuto.com/STFC.

1   Net earnings (loss) from operations, a non-GAAP financial measure
which management believes is informative to Company management and
investors, differs from GAAP net income (loss) only by the exclusion
of net investment gain (loss), net of applicable taxes, on
investment activity for the periods being reported. For STFC, this
amounted to income of $0.81 per diluted share for the first quarter
of 2019 versus income of $0.22 per diluted share for the first
quarter 2018.
 
2

Insurance industry regulators require STFC’s insurance
subsidiaries to report their financial condition and results of
operations using Statutory Accounting Practices (“SAP”). The SAP
personal and commercial segments combined ratio is a measure used
by management to evaluate STFC’s operating performance for its
ongoing operations. Details behind the compilation of these
results can be found in the SAP Insurance Segment Results table of
this release.

STFC has scheduled a conference call with interested investors for
Thursday, May 2, at 11 a.m. ET to discuss the Company’s first quarter
2019 performance. Live and archived broadcasts of the call can be
accessed at http://www.StateAuto.com/STFC.
A replay of the call can be heard beginning at 2 p.m., May 2, by calling
855-859-2056, conference ID 4067169. Supplemental schedules detailing
the Company’s first quarter 2019 financial, sales and underwriting
results are made available on http://www.StateAuto.com/STFC
prior to the conference call.

Except for historical information, all other information in this news
release consists of forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those projected, anticipated or
implied. The most significant of these uncertainties are described in
State Auto Financial’s Form 10-K and Form 10-Q reports and exhibits to
those reports, and include (but are not limited to) legislative changes
at both the state and federal level, state and federal regulatory rule
making promulgations and adjudications, class action litigation
involving the insurance industry and judicial decisions affecting
claims, policy coverages and the general costs of doing business, the
impact of competition on products and pricing, inflation in the costs of
the products and services insurance pays for, product development,
geographic spread of risk, weather and weather-related events, and other
types of catastrophic events. State Auto Financial undertakes no
obligation to update or revise any forward-looking statements.

Selected Consolidated Financial Data
($ in millions, except per share amounts)    
(unaudited) Three months ended March 31
2019 2018
Net premiums written $ 306.0   $ 292.2  
 
Earned premiums 302.7 314.9
Net investment income 19.4 19.9
Net investment gain 44.9 (11.7 )
Other income 0.6   0.6  
Total revenue 367.6   323.7  
 
Income (loss) before federal income taxes 61.6 (3.3 )
 
Federal income tax expense (benefit) 12.2   (1.2 )
Net income (loss) $ 49.4   $ (2.1 )
 
Earnings (loss) per common share:
– basic $ 1.14 $ (0.05 )
– diluted $ 1.12 $ (0.05 )
Earnings (loss) per share from operations (A):
– basic $ 0.32 $ 0.17
– diluted $ 0.31 $ 0.17
Weighted average shares outstanding:
– basic 43.3 42.6
– diluted 43.9 42.6
Return on average equity (LTM) 7.5 % (1.1 )%
Book value per share $ 20.67 $ 18.97
Dividends paid per share $ 0.10 $ 0.10
Total shares outstanding 43.3 42.7
 
GAAP ratios:
Cat loss and ALAE ratio 5.9 3.1
Non-cat loss and LAE ratio 58.3   64.3  
Loss and LAE ratio 64.2 67.4
Expense ratio 35.5   35.2  
Combined ratio 99.7   102.6  
 
(A) Reconciliation of non-GAAP financial measure:
Net income from operations:
Net income (loss) $ 49.4 $ (2.1 )
Net investment gain (loss), net of tax 35.8   (9.2 )
Net income from operations $ 13.6   $ 7.1  
 
 
Condensed Consolidated Balance Sheets
($ and shares in millions, except per share amounts)    
(unaudited) March 31 December 31
2019 2018
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost
$2,130.9 and $2,188.2, respectively)
$ 2,136.6 $ 2,159.5
Equity securities 363.9 315.0
Other invested assets 53.5 48.8
Other invested assets, at cost 5.6 5.6
Notes receivable from affiliate 70.0   70.0  
Total investments 2,629.6 2,598.9
 
Cash and cash equivalents 72.3 59.8
Accrued investment income and other assets 36.6 32.4
Deferred policy acquisition costs 104.3 101.9
Reinsurance recoverable on losses and loss expenses payable 4.6 5.5
Prepaid reinsurance premiums 6.7 6.6
Current federal income taxes 6.3 5.9
Net deferred federal income taxes 57.7 77.8
Property and equipment, net 6.0   7.1  
Total assets $ 2,924.1   $ 2,895.9  
 
LIABILITIES
Losses and loss expenses payable $ 1,128.9 $ 1,146.8
Unearned premiums 587.5 584.2
Notes payable (affiliates $15.2 and $15.2, respectively) 122.0 122.0
Pension and postretirement benefits 82.4 83.0
Due to affiliate 18.4 22.4
Other liabilities 89.6   119.0  
Total liabilities 2,028.8   2,077.4  
 
STOCKHOLDERS’ EQUITY
Common stock, without par value. Authorized 100.0 shares; 50.1 and
50.0 shares issued, respectively, at stated value of $2.50 per share
125.3 125.0
Treasury stock, 6.8 and 6.8 shares, respectively, at cost (117.5 ) (117.0 )
Additional paid-in capital 198.4 194.2
Accumulated other comprehensive loss (68.6 ) (96.4 )
Retained earnings 757.7   712.7  
Total stockholders’ equity 895.3   818.5  
Total liabilities and stockholders’ equity $ 2,924.1   $ 2,895.9  
 
 
Condensed Consolidated Statements of Income
($ in millions, except per share amounts)    
(unaudited) Three months ended March 31
2019 2018
Earned premiums $ 302.7 $ 314.9
Net investment income 19.4 19.9
Net investment gain (loss) 44.9 (11.7 )
Other income from affiliates 0.6   0.6  
Total revenues 367.6   323.7  
 
Losses and loss expenses 194.3 212.3
Acquisition and operating expenses 107.6 110.8
Interest expense 1.2 1.6
Other expenses 2.9   2.3  
Total expenses 306.0   327.0  
 
Income (loss) before federal income taxes 61.6 (3.3 )
Federal income tax expense (benefit):
Current (0.4 ) (1.0 )
Deferred 12.6   (0.2 )
Federal income tax expense (benefit) 12.2   (1.2 )
Net income (loss) $ 49.4   $ (2.1 )
Earnings (loss) per common share:
Basic $ 1.14   $ (0.05 )
Diluted $ 1.12   $ (0.05 )
Dividends paid per common share $ 0.10   $ 0.10  
 
   
Consolidated Statements of Comprehensive Income
($ in millions)
(unaudited) Three months ended March 31
2019 2018
Net income (loss) $ 49.4 $ (2.1 )
Other comprehensive income (loss), net of tax:
Net unrealized holding gain (loss) on available-for-sale investments:
Unrealized holding gain (loss) 34.5 (36.7 )
Reclassification adjustments for gains realized in net income (0.1 ) (0.4 )
Income tax (expense) benefit (7.2 ) 7.8  
Total net unrealized holding gain (loss) on available- for-sale
investments
27.2   (29.3 )
Net unrecognized benefit plan obligations:
Reclassification adjustments for amortization to statements of
income:
Prior service credit (1.6 ) (1.6 )
Net actuarial loss 2.4 3.3
Income tax expense (0.2 ) (0.4 )
Total net unrecognized benefit plan obligations 0.6   1.3  
Other comprehensive income (loss) 27.8   (28.0 )
Comprehensive income (loss) $ 77.2   $ (30.1 )
 
 
Condensed Consolidated Statement of Stockholders’ Equity
($ and shares in millions)    
(unaudited) Three Months Ended Year Ended

March 31

December 31
2019 2018
Common shares:
Balance at beginning of year 50.0 49.2
Issuance of shares 0.1   0.8  
Balance at period ended 50.1   50.0  
 
Treasury shares:
Balance at beginning of year (6.8 ) (6.8 )
Balance at period ended (6.8 ) (6.8 )
 
Common stock:
Balance at beginning of year $ 125.0 $ 123.0
Issuance of shares 0.3   2.0  
Balance at period ended 125.3   125.0  
 
Treasury stock:
Balance at beginning of year $ (117.0 ) $ (116.8 )
Shares acquired on stock award exercises and vested restricted shares (0.5 ) (0.2 )
Balance at beginning of year and period ended (117.5 ) (117.0 )
 
Additional paid-in capital:
Balance at beginning of year $ 194.2 $ 171.8
Issuance of common stock 0.7 13.3
Stock awards granted 3.5   9.1  
Balance at period ended 198.4   194.2  
 
Accumulated other comprehensive income:
Balance at beginning of the year $ (96.4 ) $ 3.8
Cumulative effect of change in accounting for equity securities and
other invested assets and reclassification of stranded tax effects
as of January 1, 2018
(63.9 )
Change in unrealized losses on available-for-sale investments, net
of tax
27.2 (38.3 )
Change in unrecognized benefit plan obligations, net of tax 0.6   2.0  
Balance at period ended (68.6 ) (96.4 )
 
Retained earnings:
Balance at beginning of year $ 712.7 $ 653.2
Cumulative effect of change in accounting for equity securities and
other invested assets and reclassification of stranded tax effects
as of January 1, 2018
63.9
Net income 49.4 12.8
Cash dividends paid (4.4 ) (17.2 )
Balance at period ended 757.7   712.7  
Total stockholders’ equity at period ended $ 895.3   $ 818.5  
 
 
Condensed Consolidated Statements of Cash Flow
($ in millions)    
(unaudited) Three months ended
March 31
2019 2018
Cash flows from operating activities:
Net income (loss) $ 49.4 $ (2.1 )
Adjustments to reconcile net income to net cash (used in) provided
by operating activities:
Depreciation and amortization, net 3.1 2.9
Share-based compensation 3.8 2.3
Net investment (gain) loss (44.9 ) 11.8
Changes in operating assets and liabilities:
Deferred policy acquisition costs (2.5 ) 5.2
Accrued investment income and other assets (4.1 ) (3.8 )
Postretirement and pension benefits (0.1 ) (0.3 )
Other liabilities and due to/from affiliates, net (33.7 ) 6.3
Reinsurance recoverable on losses and loss expenses payable and
prepaid reinsurance premiums
0.8 (1.2 )
Losses and loss expenses payable (17.9 ) (8.0 )
Unearned premiums 3.3 (22.6 )
Deferred tax expense on share-based awards 0.2
Federal income taxes 12.2   (1.2 )
Net cash used in operating activities (30.4 ) (10.7 )
Cash flows from investing activities:
Purchases of fixed maturities available-for-sale (137.2 ) (99.0 )
Purchases of equity securities (19.5 ) (61.5 )
Purchases of other invested assets (1.0 ) (0.5 )
Maturities, calls and pay downs of fixed maturities
available-for-sale
125.9 55.5
Sales of fixed maturities available-for-sale 65.6 15.3
Sales of equity securities 12.7 65.1
Sales of other invested assets 0.3   0.3  
Net cash provided by (used in) investing activities 46.8   (24.8 )
Cash flows from financing activities:
Proceeds from issuance of common stock 1.0 9.3
Payments to acquire treasury stock (0.5 ) (0.1 )
Payment of dividends (4.4 ) (4.3 )
Payment of prepayment fee    
Net cash (used in) provided by financing activities (3.9 ) 4.9  
Net increase (decrease) in cash and cash equivalents 12.5 (30.6 )
Cash and cash equivalents at beginning of period 59.8   91.5  
Cash and cash equivalents at end of period $ 72.3   $ 60.9  

Supplemental disclosures:

Interest paid (affiliates $0.2 and $0.2, respectively) $ 1.7   $ 1.6  
 
Net Investment Income
($ in millions)          
(unaudited)
3/31/2018 6/30/2018 9/30/2018 12/31/2018 3/31/2019
Quarter to Date
Gross investment income:
Fixed maturities $ 15.0 $ 14.9 $ 15.1 $ 15.0 $ 15.4
TIPS 1.1   2.0   1.3   0.9   (0.3 )
Total fixed maturities 16.1   16.9   16.4   15.9   15.1  
Equity securities 2.5 3.1 3.0 4.8 2.8
Other 1.7   1.8   1.7   2.0   1.7  
Total gross investment income 20.3 21.8 21.1 22.7 19.6
Less: Investment expenses 0.4   0.3   0.3     0.2  
Net investment income $ 19.9   $ 21.5   $ 20.8   $ 22.7   $ 19.4  
 
Year to Date
Gross investment income:
Fixed maturities $ 15.0 $ 29.9 $ 45.0 $ 60.0 $ 15.4
TIPS 1.1   3.1   4.4   5.3   (0.3 )
Total fixed maturities 16.1   33.0   49.4   65.3   15.1  
Equity securities 2.5 5.6 8.6 13.4 2.8
Other 1.7   3.5   5.2   7.2   1.7  
Total gross investment income 20.3 42.1 63.2 85.9 19.6
Less: Investment expenses 0.4   0.7   1.0   1.0   0.2  
Net investment income $ 19.9   $ 41.4   $ 62.2   $ 84.9   $ 19.4  
 
3/31/2018 6/30/2018 9/30/2018 12/31/2018 3/31/2019
TIPS, fair value $ 147.4 $ 156.5 $ 143.8 $ 142.3 $ 147.0
TIPS, book value $ 140.7 $ 150.6 $ 140.8 $ 141.2 $ 140.5
 
   
Net Investment Gain (Loss)
 
($ in millions)
unaudited Three months ended March 31
2019 2018
Realized gains on sales of securities:
Fixed maturities $ 0.1 $ 0.4
Equity securities 0.3 3.3
Other invested assets   0.1  
Total realized gains 0.4 3.8
Realized losses on sales of securities:
Sales of equity securities (2.2 ) (0.2 )
Total realized losses (2.2 ) (0.2 )
Net realized (loss) gain on investments $ (1.8 ) $ 3.6  
 

Net unrealized gain (loss) on investments(1):

Equity securities 44.1 (14.6 )
Other invested assets 3.9   (0.7 )
Net unrealized gain (loss) on investments 48.0   (15.3 )
Other net realized loss $ (1.3 ) $  
Net investment gain (loss) $ 44.9   $ (11.7 )
(1)   Unrealized holding losses recognized during the period on securities
held at the reporting date
 
   
Income Taxes
($ in millions)
(unaudited)

The following table sets forth the tax effects of temporary
differences that give rise to significant portions of deferred tax
assets and deferred tax liabilities:

 
March 31 December 31
2019 2018
Deferred tax assets:
Unearned premiums not currently deductible $ 24.4 $ 24.3
Losses and loss expenses payable discounting 19.5 19.9
Postretirement and pension benefits 21.3 21.4
Net unrealized holding losses on investments 6.2
Realized loss on other-than-temporary impairment 2.0 1.9
Other liabilities 12.3 14.8
Net operating loss carryforward 15.2 15.1
Tax credit carryforwards 2.3 2.7
Other 2.0   1.6
Total deferred tax assets 99.0   107.9
Deferred tax liabilities:
Deferral of policy acquisition costs 21.9 21.4
Net unrealized holding gains on investments 11.0
Losses and loss expenses payable discounting (transition rule) 8.4   8.7
Total deferred tax liabilities 41.3   30.1
Net deferred federal income taxes $ 57.7   $ 77.8
The following table sets forth the components of federal income tax
expense (benefit):
 
Three months ended March 31
2019   2018
Income (loss) before federal income taxes $ 61.6 $ (3.3 )
Federal income tax expense (benefit):
Current (0.4 ) (1.0 )
Deferred 12.6   (0.2 )
Total federal income tax expense (benefit) 12.2   (1.2 )
Net income (loss) $ 49.4   $ (2.1 )
 
 
SAP Personal Insurance Segment Results
($ in millions)        
Three Months Ended March 31, 2019 Personal Auto Homeowners Other Personal Total
 
Net written premiums $ 107.7 $ 64.4 $ 8.4 $ 180.5
Net earned premiums 105.4 68.7 7.4 181.5
Losses and LAE incurred:
Cat loss and ALAE 0.9 12.4 0.7 14.0
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE (6.8 ) 0.6 (0.7 ) (6.9 )
Current accident year non-cat loss and ALAE 65.8   29.9   4.4   100.1  
Total non-cat loss and ALAE 59.0   30.5   3.7   93.2  
Total Loss and ALAE 59.9 42.9 4.4 107.2
ULAE 7.2   5.2   0.3   12.7  
Total Loss and LAE 67.1 48.1 4.7 119.9
Underwriting expenses 32.7   21.8   2.9   57.4  
Net underwriting gain (loss) $ 5.6   $ (1.2 ) $ (0.2 ) $ 4.2  
 
Cat loss and ALAE ratio 0.8 % 18.1 % 9.6 % 7.7 %
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio (6.5 )% 0.9 % (8.9 )% (3.8 )%
Current accident year non-cat loss and ALAE ratio 62.4 % 43.6 % 58.6 % 55.2 %
Total non-cat loss and ALAE ratio 55.9 % 44.5 % 49.7 % 51.4 %
Total Loss and ALAE ratio 56.7 % 62.6 % 59.3 % 59.1 %
ULAE ratio 6.8 % 7.5 % 4.1 % 7.0 %
Total Loss and LAE ratio 63.5 % 70.1 % 63.4 % 66.1 %
Expense ratio 30.4 % 33.7 % 34.6 % 31.8 %
Combined ratio 93.9 % 103.8 % 98.0 % 97.9 %
($ in millions)        
Three Months Ended March 31, 2018 Personal Auto Homeowners Other Personal Total
 
Net written premiums $ 101.9 $ 54.3 $ 5.5 $ 161.7
Net earned premiums 93.5 57.9 4.9 156.3
Losses and LAE incurred:
Cat loss and ALAE 0.1 4.7 0.4 5.2
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE (4.0 ) (2.8 ) 0.2 (6.6 )
Current accident year non-cat loss and ALAE 66.9   28.4   2.0   97.3  
Total non-cat loss and ALAE 62.9   25.6   2.2   90.7  
Total Loss and ALAE 63.0 30.3 2.6 95.9
ULAE 5.0   4.0   0.3   9.3  
Total Loss and LAE 68.0 34.3 2.9 105.2
Underwriting expenses 28.9   18.2   2.3   49.4  
Net underwriting (loss) gain $ (3.4 ) $ 5.4   $ (0.3 ) $ 1.7  
 
Cat loss and ALAE ratio 0.1 % 8.2 % 7.9 % 3.4 %
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio (4.3 )% (4.8 )% 4.8 % (4.2 )%
Current accident year non-cat loss and ALAE ratio 71.6 % 49.0 % 40.9 % 62.2 %
Total non-cat loss and ALAE ratio 67.3 % 44.2 % 45.7 % 58.0 %
Total Loss and ALAE ratio 67.4 % 52.4 % 53.6 % 61.4 %
ULAE ratio 5.2 % 6.9 % 5.2 % 5.9 %
Total Loss and LAE ratio 72.6 % 59.3 % 58.8 % 67.3 %
Expense ratio 28.4 % 33.6 % 42.5 % 30.6 %
Combined ratio 101.0 % 92.9 % 101.3 % 97.9 %
 
 
SAP Commercial Insurance Segment Results
($ in millions)              
Small Middle
Three months ended Commercial Commercial Market Workers’ Farm & Other
March 31, 2019 Auto Package Commercial Comp Ranch Commercial Total
 
Net written premiums $ 24.0 $ 30.5 $ 34.2 $ 19.5 $ 12.4 $ 4.5 $ 125.1
Net earned premiums 19.7 29.6 30.7 20.5 11.8 4.1 116.4
Losses and LAE incurred:
Cat loss and ALAE 0.1 1.5 1.3 0.3 3.2
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE (1.5 ) (4.8 ) (3.1 ) (4.5 ) (0.4 ) (1.0 ) (15.3 )
Current accident year non-cat loss and ALAE 11.9   15.9   26.0   13.6   5.1   2.1   74.6  
Total non-cat loss and ALAE 10.4   11.1   22.9   9.1   4.7   1.1   59.3  
Total Loss and ALAE 10.5 12.6 24.2 9.1 5.0 1.1 62.5
ULAE 1.3   1.8   1.3   1.6   0.6   0.2   6.8  
Total Loss and LAE 11.8 14.4 25.5 10.7 5.6 1.3 69.3
Underwriting expenses 10.7   12.5   14.2   7.4   6.2   2.0   53.0  
Net underwriting (loss) gain $ (2.8 ) $ 2.7   $ (9.0 ) $ 2.4   $   $ 0.8   $ (5.9 )
Cat loss and ALAE ratio 0.4 % 5.1 % 4.3 % % 2.2 % % 2.7 %
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio (7.3 )% (16.2 )% (10.2 )% (22.0 )% (3.7 )% (23.5 )% (13.1 )%
Current accident year non-cat loss and ALAE ratio 60.2 % 53.8 % 84.7 % 66.4 % 43.0 % 52.6 % 64.1 %

Total non-cat loss and ALAE ratio

52.9 % 37.6 % 74.5 % 44.4 % 39.3 % 29.1 % 51.0 %
Total Loss and ALAE ratio 53.3 % 42.7 % 78.8 % 44.4 % 41.5 % 29.1 % 53.7 %
ULAE ratio 6.6 % 6.1 % 4.2 % 8.1 % 5.0 % 4.4 % 5.9 %
Total Loss and LAE ratio 59.9 % 48.8 % 83.0 % 52.5 % 46.5 % 33.5 % 59.6 %
Expense ratio 44.8 % 41.0 % 41.5 % 37.9 % 50.0 % 44.6 % 42.4 %
Combined ratio 104.7 % 89.8 % 124.5 % 90.4 % 96.5 % 78.1 % 102.0 %
 
($ in millions)              
Small Middle
Three months ended Commercial Commercial Market Workers’ Farm & Other
March 31, 2018 Auto Package Commercial Comp Ranch Commercial Total
 
Net written premiums $ 18.6 $ 30.4 $ 29.1 $ 24.4 $ 11.5 $ 4.1 $ 118.1
Net earned premiums 18.4 30.4 28.6 22.8 11.0 3.7 114.9
Losses and LAE incurred:
Cat loss and ALAE 3.2 1.5 (0.1 ) 4.6
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE (3.5 ) (0.5 ) (2.5 ) (2.3 ) 0.3 (1.2 ) (9.7 )
Current accident year non-cat loss and ALAE 12.4   18.2   21.5   15.1   4.2   2.0   73.4  
Total non-cat loss and ALAE 8.9   17.7   19.0   12.8   4.5   0.8   63.7  
Total Loss and ALAE 8.9 20.9 20.5 12.8 4.4 0.8 68.3
ULAE 1.2   1.3   1.5   2.3   0.3   0.3   6.9  
Total Loss and LAE 10.1 22.2 22.0 15.1 4.7 1.1 75.2
Underwriting expenses 8.1   13.8   11.3   8.0   4.8   2.0   48.0  
Net underwriting (loss) gain $ 0.2   $ (5.6 ) $ (4.7 ) $ (0.3 ) $ 1.5   $ 0.6   $ (8.3 )
Cat loss and ALAE ratio % 10.7 % 5.1 % % (0.5 )% (0.2 )% 4.1 %
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio (18.9 )% (1.5 )% (8.8 )% (10.0 )% 2.9 % (33.8 )% (8.4 )%
Current accident year non-cat loss and ALAE ratio 67.2 % 59.4 % 75.7 % 66.2 % 37.4 % 55.7 % 63.7 %

Total non-cat loss and ALAE ratio

48.3 % 57.9 % 66.9 % 56.2 % 40.3 % 21.9 % 55.3 %
Total Loss and ALAE ratio 48.3 % 68.6 % 72.0 % 56.2 % 39.8 % 21.7 % 59.4 %
ULAE ratio 6.3 % 4.2 % 5.3 % 9.8 % 3.0 % 8.0 % 6.0 %
Total Loss and LAE ratio 54.6 % 72.8 % 77.3 % 66.0 % 42.8 % 29.7 % 65.4 %
Expense ratio 43.8 % 45.4 % 39.0 % 33.1 % 41.7 % 47.2 % 40.7 %
Combined ratio 98.4 % 118.2 % 116.3 % 99.1 % 84.5 % 76.9 % 106.1 %
 

Contacts

State Auto Financial Corporation

Media contact:
Kyle Anderson, 614-917-5497
[email protected]

Investor contact:
Natalie Schoolcraft, 614-917-4341
[email protected]

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