State Auto Financial Notes Q2 Earnings

Ohio-based State Auto Financial Corporation State Auto Financial Corporation reported second quarter net income of $8,301,000, or $0.21 per diluted share, versus a loss of $1,385,000 or $0.04 per diluted share for the same period 2002. Net operating earnings* per share were $0.14 diluted, versus a loss of $0.02 diluted, for the same period 2002.

STFC’s GAAP combined ratio for the second quarter was 103.8 versus 108.6 for the second quarter 2002. Catastrophe losses added a total of 17.1 points to the loss ratio during the quarter. STFC’s second quarter revenue was $263,160,000, up 11.4 percent from $236,223,000. Second quarter written premium increased 5.5 percent over the second quarter 2002.

Revenue for the first six months 2003 was $516,512,000, up 10.8 percent from $466,182,000. For the first six months of 2003, net income was $29,365,000, or $0.74 per diluted share, compared with $11,779,000 or $0.29 per diluted share for the same 2002 period. Year to date GAAP combined ratio for 2003 stands at 99.6 compared to 103.7 for 2002. STFC shareholders’ book value per share has increased by 10.0 percent during the first six months of 2003 to $13.08 per share.

“Given the momentum of two straight record-breaking quarters, the negative impact of CAT 88 on the second quarter of 2003 was a disappointment. This storm, which was previously reported, caused damage in 17 states over a nine-day period and has developed into the costliest single catastrophe event in State Auto’s history. We are never satisfied unless we achieve an underwriting profit in each period.

“Still, it is instructive to recognize that continued improvement in each reporting segment of our core book of business allowed us to come within four points of that goal despite these record CAT losses. It is also gratifying that we were able to post a positive net income and increase shareholder book value during the quarter,” said STFC chairman and CEO Bob Moone.