State Auto Reports Record Quarterly Results

Ohio-based State Auto Financial Corp. reported record second quarter net income of $34.6 million, or $0.85 per diluted share, versus $8.3 million or $0.21 per diluted share for the same period in 2003. Net operating earnings(a) per share were $0.83 diluted, versus $0.14 diluted, for the same period in 2003.

STFC’s combined ratio for the quarter was 87.0, on a GAAP basis, versus 103.8 for the second quarter of 2003. Catastrophe losses accounted for only 5.1 points of the loss ratio during the second quarter of 2004 compared with 17.1 points for the same period in 2003. STFC’s second quarter revenue was $273.1 million, up from $263.2 million.

Revenue for the first six months of 2004 was $546.2 million, up from $516.5 million for 2003. For the first six months of 2004, net income was $67.0 million, or $1.65 per diluted share, compared with $29.4 million or $0.74 per diluted share for the same 2003 period, an increase of 128%. Year to date GAAP combined ratio for 2004 stands at 88.3 compared with 99.6 for 2003. STFC shareholders’ book value per share has increased during the first six months of 2004 to $14.69 per share.

“We are very pleased to announce another record breaking quarter for STFC. While the industry as a whole is performing much better than in previous years, we believe our long-term emphasis on responsible underwriting and cost-based pricing continues to set us apart from the pack. This is the sixth quarter of the last seven that we have reported new highs in earnings per share for the same year over year period,” STFC Chairman and CEO Bob Moone commented.

“While catastrophe losses moderately impacted our second quarter results, they were significantly less severe than during the comparable quarters of 2002 and 2003. This milder than average weather related loss experience, coupled with a continuation of improvement in our core loss ratios, allowed us to produce these outstanding results,” Moone added.