State Auto Financial Announces 4Q Losses, Higher Annual Revenues

Ohio-based State Auto Financial Corporation, a regional property and casualty insurance holding company reported net losses for the fourth quarter of 2001 and increased revenues for the year.

The company, which primarily writes personal and commercial automobile, homeowners, commercial multi-peril, workers’ compensation and fire insurance, announced a net reported loss per share of $0.27, $0.27 diluted, for the fourth quarter ending Dec. 31, 2001, compared to net reported earnings per share of $0.35, $0.34 diluted, for same period last year. Net losses for the 2001 fourth quarter were $10,635,000, compared to net earnings of $13,531,000 for the 2000 fourth quarter. STFC’s fourth quarter 2001 GAAP combined loss and expense ratio was 115.8, compared to 96.4 for the fourth quarter 2000.

For the year ending Dec. 31, 2001, STFC’s GAAP combined ratio was 107.0, compared to 98.4 for the year ending Dec. 31, 2000. Total net earnings for 2001 were $20,615,000, or $0.53 per share, $0.52 diluted, compared to $1.24 per share, $1.21 diluted, for 2000. The company’s total revenue for 2001 was $623,287,000, a 34.7 percent increase over 2000′s $462,774,000 total.

The company stated its “fourth quarter results were significantly impacted by loss reserve adjustments on claims for the former Meridian Mutual Insurance Company (Meridian) occurring prior to October 1, 2001. The case reserve deficiencies are now behind us. This assessment is based on the fact that our Indianapolis-based claims handlers completed reviews of virtually every open loss before year end and on the lack of notable case reserve adjustments since the beginning of the new year.”