State Auto Income Up for Q1 2010

April 29, 2010

State Auto Financial Corp.(STFC), based in Columbus, Ohio, has reported first quarter 2010 net income of $12.9 million versus a net loss of $14 million. The company’s combined ratio for the first quarter of 2010 was 99.7 compared with 112.0 for the first quarter of 2009.

Catastrophe losses for the first quarter 2010 accounted for 3.3 points of the 66.2 total loss ratio points, or $10.1 million, versus 15.3 points of the total 78.6 loss ratio points, or $43.8 million, for the same period in 2009.

Net written premiums for the first quarter 2010 increased 5.9 percent over the same period in 2009.

STFC’s book value was $21.65 per share as of March 31, 2010, an increase of $0.32 per share from STFC’s book value on Dec. 31, 2009.

Return on stockholders’ equity for the twelve months ended March 31, 2010, was 4.6 percent compared to negative 4.0 percent for the twelve months ended March 31, 2009.

“Our story for the quarter is one of underwriting profit, strong growth and improving return on equity. Underwriting results were helped by normal first quarter catastrophe results and improved performance in personal auto and commercial lines. Homeowners loss ratios remain stubbornly high, but we’re confident we have the pricing and underwriting actions in place to improve results and achieve profitability,” said STFC chairman, president and CEO Bob Restrepo, in an announcement released by the company.

Restrepo said personal lines of insurance led the company’s growth in the first quarter, “largely on the strength of price increases in standard personal auto and homeowners, excellent policy retention, and strong sales in four expansion states. Business insurance growth remains constrained by continued pricing competition and a weak economy.”

Still, a new commercial specialty business, Risk Evaluation and Design LLC (RED), accounted for 2 percent of the total net written premium growth for the quarter, Restrepo said.

He noted that agents continue to be concerned about pricing, “both in terms of the significant increases we’re taking in homeowners and our rates in the weak commercial lines environment.” However, he said he remains “impressed by the quality, depth and positive relationships our people have built over the years with our agency partners.”

Source: State Auto Financial Corp.

Topics Trends Profit Loss Auto

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