State Auto Reports Revenue Increases for 2009

February 22, 2010

Columbus, Ohio-based State Auto Financial Corporation’s fourth quarter 2009 net income rose to $14.4 million compared with a net loss of $0.6 million for the fourth quarter 2008, the company reported.

For the year 2009, STFC had net income of $10.2 million compared to a loss of $31.1 million for 2008.

It’s combined ratio for the fourth quarter 2009 rose slightly to 98.4 versus 96.0 for the fourth quarter 2008. The company’s combined ratio for the year was 105.8 compared to 109.8 for 2008.

Catastrophe losses, including prior accident period development, favorably impacted the loss ratio for the quarter by 0.4 points, or $1.2 million, compared to a favorable impact of 3.7 points, or $10.4 million, during the fourth quarter 2008. Net written premiums for the fourth quarter 2009 increased by 3.5 percent in comparison to the fourth quarter 2008.

For all of 2009, catastrophe losses increased the loss ratio by 7.7 points, or $90.3 million, compared to 13.9 points, or $156.1 million, during 2008. The 2009 and 2008 catastrophe losses both included favorable prior accident years’ development which reduced the loss ratio by 0.9 points, or $10.9 million, for 2009 and 0.5 points, or $6.4 million, for 2008.

Non-catastrophe favorable reserve development reduced the loss ratio by 3.9 points, or $45.3 million, for 2009 and 1.9 points, or $20.9 million, for 2008. Net written premiums for 2009 increased 5.1 percent in comparison to 2008.

“State Auto’s overall premium growth should exceed industry results for 2009,” said STFC chairman, president and CEO Bob Restrepo. “Sales in the personal insurance lines were strong, growing at 11.8 percent in the fourth quarter and 12.2 percent for the year.

“Fourth quarter auto and homeowner direct written premiums were up 14.2 percent and 14.0 percent, respectively, with more than half coming from our established states and the remainder from our expansion states – Arizona, Colorado, Connecticut and Texas.

“Rate changes accounted for about 3.5 percent of the auto premium growth and about 7 percent of the homeowners premium growth. We expect growth in personal lines to be tempered in 2010, however, based on our pricing actions.”

Restrepo said business insurance sales continued on a downward trend. The company’s business insurance sales were down 9.3 percent for the quarter and down 5.5 percent for the year.

Restrepo added that State Auto would not “force growth in business insurance at the expense of profitability. Our main line business insurance pricing is stabilizing after modest premium per exposure increases in the fourth quarter. Until the market pricing firms and the economy recovers, we will rely on new products, improving technology and a strong field staff to stabilize the sales trend.”

Source: State Auto, www.stateauto.com

Was this article valuable?

Here are more articles you may enjoy.