- Quarterly income of $0.08 per share
- Quarterly net loss from operations1 of $0.61 per share
- Quarterly GAAP combined ratio of 112.9
- Quarterly SAP combined ratio of 112.3
- Return on equity of 14.3%
- Book value per share of $22.07
State Auto Financial Corporation (NASDAQ:STFC) today reported
first quarter 2021 net income of $3.6 million, or $0.08 per diluted
share, compared to a net loss of $114.6 million, or $2.62 per
diluted share, for the same 2020 period. Net loss from operations1
per diluted share for the first quarter of 2021 was $0.61 versus
$0.18 for the same 2020 period. STFC’s GAAP combined ratio for the
first quarter 2021 was 112.9 compared to 107.2 for the same 2020
period.
SAP Operating Results
STFC's SAP combined ratio for the first quarter 2021 was 112.3
compared to 107.4 for the same 2020 period. Catastrophe losses and
ALAE during the first quarter 2021 accounted for 20.1 points of the
78.8 total loss ratio points, or $71.6 million, versus 12.7 points
of the 72.5 total loss ratio points, or $41.9 million, for the same
period in 2020. The first quarter 2021 was impacted by winter
storms Uri and Viola in Texas, which added 17.0 points to the first
quarter loss and ALAE ratio. Approximately 75% of the first quarter
2021 catastrophe losses occurred within homeowners. Non-catastrophe
losses and ALAE during the first quarter 2021 included 6.9 points
of favorable development relating to prior years, or $24.6 million,
versus 3.2 points of favorable development, or $10.5 million, for
the same period in 2020.
Net written premium for the first quarter 2021 increased 3.5%
compared to the same period in 2020. By insurance segment, net
written premium for the commercial insurance segment increased
13.0% and the personal insurance segment decreased 3.2%. The
increase in the commercial segment was primarily driven by new
business growth and rate increases in commercial auto and small
commercial package and new business growth in farm & ranch. The
net written premium growth was partially offset by a decrease in
net written premiums in workers’ compensation due to our 2020
decision to not renew and no longer write nursing home business,
and a decrease in net written premiums in middle market commercial
due to a decline in new business. The decrease in the personal
segment was primarily due to a decline in new business in personal
auto, partially offset by new business growth and rate increases in
other personal and rate increases in homeowners.
Book Value and Return on Equity
STFC’s book value decreased to $22.07 per share as of March 31,
2021, compared to $23.00 on December 31, 2020. The decrease in book
value was primarily driven by a decline in the fair market value of
fixed income investments attributable to higher interest rates.
Return on stockholders’ equity for the 12 months ended March 31,
2021, was 14.3% compared to (8.7)% for the 12 months ended March
31, 2020.
STFC’s Chairman, President and CEO Mike LaRocco commented on the
quarter as follows:
“Our first quarter was solid, with continued growth, expense
ratio improvement and progress toward sustained profitability.
Catastrophes, though, had a significant impact on our results.
“The winter weather in Texas was devastating for many of our
customers. Our Claims and Risk Engineering (CARE) team, on the
ground in Texas and remotely from locations throughout the country,
delivered exceptional service to those affected. I couldn’t be more
proud of their efforts.
“The Texas weather added 17.0 points to the first quarter 2021
SAP combined ratio of 112.3, primarily in the homeowners line.
Commercial lines added another quarter of profitability while
producing 13.0% net written premium growth. Personal lines net
written premium decreased 3.2%, with a 125.9 combined ratio that
included 30.1 points of catastrophe losses. Personal auto returned
to profitability with a 98.9 combined ratio. The team worked hard
over the last two years to return this line to profitability and
we’re seeing the results of those actions.
“We are beginning to see improvement in our expense ratio having
recently completed the five-year build phase of our State Auto
Connect digital technology platform, which gives us the ability to
efficiently add scale. Middle market commercial launched in its
last state in April and workers’ compensation will continue its
rollout through the end of 2021.
“During the first quarter, we delivered in the most important
way: By taking care of our customers in their time of need. At the
same time, we produced results that represented continued progress
toward our goal of consistent, sustained profitable growth.”
About State Auto Financial Corporation
State Auto Financial Corporation, headquartered in Columbus,
Ohio, is a super regional property and casualty insurance holding
company. STFC stock is traded on the Nasdaq Global Select Market,
which represents the top fourth of all Nasdaq listed companies.
The insurance subsidiaries of State Auto Financial Corporation
are part of the State Auto Group. The State Auto Group markets its
insurance products throughout the United States, through
independent insurance agencies. The State Auto Group is rated A-
(Excellent) by the A.M. Best Company and includes State Automobile
Mutual, State Auto Property & Casualty, State Auto Ohio, State
Auto Wisconsin, Milbank, Meridian Security, Patrons Mutual,
Rockhill Insurance, Plaza Insurance, American Compensation and
Bloomington Compensation. Additional information on State Auto
Financial Corporation and the State Auto Insurance Companies can be
found online at http://www.StateAuto.com/STFC.
STFC has scheduled a conference call with interested investors
for Thursday, May 6, at 11 a.m. ET to discuss the Company’s first
quarter 2021 performance. Live and archived broadcasts of the call
can be accessed at http://www.StateAuto.com/STFC. A replay of the
call can be heard beginning at 2 p.m., May 6, by calling
855-859-2056, conference ID 6944689. Supplemental schedules
detailing the Company’s first quarter 2021 financial, sales and
underwriting results are made available on
http://www.StateAuto.com/STFC prior to the conference call.
1 Net earnings (loss) from operations, a non-GAAP financial
measure which management believes is informative to Company
management and investors, differs from GAAP net income (loss) only
by the exclusion of net investment gain (loss), net of applicable
taxes, on investment activity for the periods being reported. For
STFC, this amounted to income of $0.69 per diluted share for the
first quarter of 2021 versus a loss of $2.44 per diluted share for
the first quarter 2020.
* * * * *
Except for historical information, all other information in this
news release consists of forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected, anticipated or implied. The most significant
of these uncertainties are described in State Auto Financial's Form
10-K and Form 10-Q reports and exhibits to those reports, and
include (but are not limited to) legislative changes at both the
state and federal level, state and federal regulatory rule making
promulgations and adjudications, class action litigation involving
the insurance industry and judicial decisions affecting claims,
policy coverages and the general costs of doing business, the
impact of competition on products and pricing, inflation in the
costs of the products and services insurance pays for, product
development, geographic spread of risk, weather and weather-related
events, and other types of catastrophic events. State Auto
Financial undertakes no obligation to update or revise any
forward-looking statements.
Selected Consolidated Financial Data
($ in millions, except per share
amounts)
(unaudited)
Three months ended March 31
2021
2020
Net premiums written
$
358.7
$
346.5
Earned premiums
355.9
330.5
Net investment income
17.6
18.9
Net investment gain (loss)
38.2
(135.2
)
Other income
0.5
0.6
Total revenue
412.2
214.8
Income (loss) before federal income
taxes
5.6
(144.0
)
Federal tax expense (benefit)
2.0
(29.4
)
Net income (loss)
$
3.6
$
(114.6
)
Earnings (loss) per common share:
- basic
$
0.08
$
(2.62
)
- diluted
$
0.08
$
(2.62
)
Loss per share from operations(A):
- basic
$
(0.61
)
$
(0.18
)
- diluted
$
(0.61
)
$
(0.18
)
Weighted average shares outstanding:
- basic
43.9
43.7
- diluted
44.6
43.7
Return on average equity (LTM)
14.3
%
(8.7
)%
Book value per share
$
22.07
$
19.83
Dividends paid per share
$
0.10
$
0.10
Total shares outstanding
44.0
43.7
GAAP ratios:
Cat loss and ALAE ratio
20.1
12.7
Non-cat loss and LAE ratio
58.8
59.7
Loss and LAE ratio
78.9
72.4
Expense ratio
34.0
34.8
Combined ratio
112.9
107.2
(A) Reconciliation of non-GAAP financial
measure:
Net loss from operations:
Net income (loss)
$
3.6
$
(114.6
)
Net investment gain (loss), net of tax
30.2
(106.8
)
Net loss from operations
$
(26.6
)
$
(7.8
)
Condensed Consolidated Balance
Sheets
($ and shares in millions, except per
share amounts)
(unaudited)
March 31
December 31
2021
2020
ASSETS
Fixed maturities, available-for-sale, at
fair value (amortized cost $2,147.5 and $2,117.0, respectively)
$
2,209.0
$
2,237.2
Equity securities
399.6
389.7
Other invested assets
76.4
71.1
Other invested assets, at cost
11.8
12.1
Notes receivable from affiliate
70.0
70.0
Total investments
2,766.8
2,780.1
Cash and cash equivalents
59.1
90.7
Accrued investment income and other
assets
31.0
29.7
Premiums Receivable
12.3
14.0
Deferred policy acquisition costs
121.2
122.2
Reinsurance recoverable on losses and loss
expenses payable
23.6
24.3
Prepaid reinsurance premiums
8.5
8.3
Current federal income taxes
1.7
1.7
Net deferred federal income taxes
37.1
27.3
Property and equipment, at cost
4.2
4.2
Total assets
$
3,065.5
$
3,102.5
LIABILITIES
Losses and loss expenses payable
$
1,066.3
$
1,050.4
Unearned premiums
726.7
723.4
Notes payable (affiliates $15.3 and $15.3,
respectively)
122.1
122.1
Pension and postretirement benefits
59.2
66.2
Due to affiliate
22.1
11.2
Other liabilities
97.1
119.2
Total liabilities
2,093.5
2,092.5
STOCKHOLDERS' EQUITY
Common stock, without par value.
Authorized 100.0 shares; 50.9 and 50.7 shares issued, respectively,
at stated value of $2.50 per share
127.4
126.8
Treasury stock, 6.9 and 6.9 shares,
respectively, at cost
(118.9
)
(118.4
)
Additional paid-in capital
220.1
213.3
Accumulated other comprehensive (loss)
income
(30.1
)
13.9
Retained earnings
773.5
774.4
Total stockholders' equity
972.0
1,010.0
Total liabilities and stockholders'
equity
$
3,065.5
$
3,102.5
Condensed Consolidated Statements of
Income
($ in millions, except per share
amounts)
(unaudited)
Three months ended March 31
2021
2020
Earned premiums
$
355.9
$
330.5
Net investment income
17.6
18.9
Net investment gain (loss)
38.2
(135.2
)
Other income from affiliates
0.5
0.6
Total revenues
412.2
214.8
Losses and loss expenses
280.8
239.4
Acquisition and operating expenses
121.0
114.9
Interest expense
1.1
1.2
Other expenses
3.7
3.3
Total expenses
406.6
358.8
Income (loss) before federal income
taxes
5.6
(144.0
)
Federal income tax expense (benefit):
Deferred
2.0
(29.4
)
Federal income tax expense (benefit)
2.0
(29.4
)
Net income (loss)
$
3.6
$
(114.6
)
Earnings (loss) per common share:
Basic
$
0.08
$
(2.62
)
Diluted
$
0.08
$
(2.62
)
Dividends paid per common share
$
0.10
$
0.10
Consolidated Statements of
Comprehensive Loss
($ in millions)
(unaudited)
Three months ended March 31
2021
2020
Net income (loss)
$
3.6
$
(114.6
)
Other comprehensive (loss) income, net
of tax:
Net unrealized holding (loss) gain on
available-for-sale investments:
Unrealized holding (loss) gain
(57.2
)
31.0
Reclassification adjustments for gains
realized in net income
(1.5
)
(2.4
)
Income tax benefit (expense)
12.4
(6.0
)
Total net unrealized holding (loss) gain
on available- for-sale investments
(46.3
)
22.6
Net unrecognized benefit plan
obligations:
Reclassification adjustments for
amortization to statements of income:
Prior service credit
(1.6
)
(1.6
)
Net actuarial loss
4.5
3.7
Income tax expense
(0.6
)
(0.5
)
Total net unrecognized benefit plan
obligations
2.3
1.6
Other comprehensive (loss) income
(44.0
)
24.2
Comprehensive loss
$
(40.4
)
$
(90.4
)
Condensed Consolidated Statement of
Stockholders' Equity
($ and shares in millions)
(unaudited)
Three Months Ended
Year Ended
March 31
December 31
2021
2020
Common shares:
Balance at beginning of year
50.7
50.4
Issuance of shares
0.2
0.3
Balance at period ended
50.9
50.7
Treasury shares:
Balance at beginning of year
(6.9
)
(6.9
)
Balance at period ended
(6.9
)
(6.9
)
Common stock:
Balance at beginning of year
$
126.8
$
125.9
Issuance of shares
0.6
0.9
Balance at period ended
127.4
126.8
Treasury stock:
Balance at beginning of year
$
(118.4
)
$
(117.5
)
Shares acquired on stock award exercises
and vested restricted shares
(0.5
)
(0.9
)
Balance at beginning of year and period
ended
(118.9
)
(118.4
)
Additional paid-in capital:
Balance at beginning of year
$
213.3
$
206.7
Issuance of common stock
0.6
3.0
Stock awards granted
6.2
3.6
Balance at period ended
220.1
213.3
Accumulated other comprehensive (loss)
income:
Balance at beginning of the year
$
13.9
$
(26.9
)
Change in net unrealized holding gains on
available-for-sale investments
(46.3
)
56.7
Change in net unrecognized benefit plan
obligations
2.3
(15.9
)
Balance at period ended
(30.1
)
13.9
Retained earnings:
Balance at beginning of year
$
774.4
$
779.3
Cumulative effect of change in accounting
to establish an allowance for expected credit losses at January 1,
2020
—
(0.5
)
Net income
3.6
13.1
Cash dividends paid
(4.5
)
(17.5
)
Balance at period ended
773.5
774.4
Total stockholders' equity at period
ended
$
972.0
$
1,010.0
Condensed Consolidated Statements of
Cash Flow
($ in millions)
(unaudited)
Three months ended
March 31
2021
2020
Cash flows from operating
activities:
Net income (loss)
$
3.6
$
(114.6
)
Adjustments to reconcile net income (loss)
to net cash used in operating activities
Depreciation and amortization, net
1.8
1.6
Share-based compensation
6.7
0.5
Net investment (gain) loss
(38.2
)
135.2
Changes in operating assets and
liabilities:
Deferred policy acquisition costs
1.0
(2.2
)
Accrued investment income and other
assets
(1.3
)
(1.5
)
Premiums receivable
1.7
(1.4
)
Postretirement and pension benefits
(6.4
)
(0.9
)
Other liabilities and due to/from
affiliates, net
(9.5
)
(24.8
)
Reinsurance recoverable on losses and loss
expenses payable and prepaid reinsurance premiums
0.5
(26.5
)
Losses and loss expenses payable
15.9
19.5
Unearned premiums
3.3
16.5
Deferred tax on share-based awards
(0.4
)
(0.2
)
Federal income taxes
2.4
(29.2
)
Net cash used in operating
activities
(18.9
)
(28.0
)
Cash flows from investing
activities:
Purchases of fixed maturities
available-for-sale
(239.7
)
(122.4
)
Purchases of equity securities
(9.4
)
(16.1
)
Purchases of other invested assets
(0.1
)
(6.6
)
Maturities, calls and pay downs of fixed
maturities available-for-sale
102.8
67.9
Sales of fixed maturities
available-for-sale
106.0
83.5
Sales of equity securities
31.1
13.2
Sales of other invested assets
0.3
0.4
Disposals of property and equipment
—
0.2
Net cash (used in) provided by
investing activities
(9.0
)
20.1
Cash flows from financing
activities:
Proceeds from issuance of common stock
1.2
1.8
Payments to acquire treasury stock
(0.4
)
(0.9
)
Payment of dividends
(4.5
)
(4.4
)
Proceeds from short-term debt
—
60.0
Net cash (used in) provided by
financing activities
(3.7
)
56.5
Net (decrease) increase in cash and cash
equivalents
(31.6
)
48.6
Cash and cash equivalents at beginning of
period
90.7
78.0
Cash and cash equivalents at end of
period
$
59.1
$
126.6
Supplemental disclosures:
Interest paid (affiliates $0.2 and $0.2,
respectively)
$
1.1
$
1.2
Net Investment Income
($ in millions)
(unaudited)
3/31/2020
6/30/2020
9/30/2020
12/31/2020
3/31/2021
Quarter to Date
Gross investment income:
Fixed maturities
$
14.5
$
14.8
$
13.7
$
14.3
$
14.7
TIPS
0.6
(0.3
)
1.3
0.7
0.7
Total fixed maturities
15.1
14.5
15.0
15.0
15.4
Equity securities
3.1
2.6
2.1
1.5
1.6
Other
1.0
0.8
0.9
1.3
0.9
Total gross investment income
19.2
17.9
18.0
17.8
17.9
Less: Investment expenses
0.3
0.2
0.1
0.2
0.3
Net investment income
$
18.9
$
17.7
$
17.9
$
17.6
$
17.6
Year to Date
Gross investment income:
Fixed maturities
$
14.5
$
29.3
$
43.0
$
57.3
$
14.7
TIPS
0.6
0.3
1.6
2.3
0.7
Total fixed maturities
15.1
29.6
44.6
59.6
15.4
Equity securities
3.1
5.7
7.8
9.3
1.6
Other
1.0
1.8
2.7
4.0
0.9
Total gross investment income
19.2
37.1
55.1
72.9
17.9
Less: Investment expenses
0.3
0.5
0.6
0.8
0.3
Net investment income
$
18.9
$
36.6
$
54.5
$
72.1
$
17.6
3/31/2020
6/30/2020
9/30/2020
12/31/2020
3/31/2021
TIPS, fair value
$
111.4
$
115.9
$
117.0
$
116.2
$
104.7
TIPS, book value
$
101.5
$
100.9
$
99.4
$
97.8
$
89.2
Net Investment Gain (Loss)
($ in millions)
unaudited
Three months ended March 31
2021
2020
Investment gain (loss), net:
Fixed maturities:
Realized gains on sales of securities
$
3.0
$
3.6
Realized losses on sales of securities
(1.5
)
(1.2
)
Net gain on fixed securities
1.5
2.4
Net gain (loss) on equity securities
31.5
(122.4
)
Net gain (loss) on other invested
assets
5.2
(15.4
)
Other net realized gain
—
0.2
Net gain (loss) on investments
$
38.2
$
(135.2
)
Income Taxes
($ in millions)
(unaudited)
The following table sets forth the tax
effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities:
March 31
December 31
2021
2020
Deferred tax assets:
Unearned premiums not currently
deductible
$
30.2
$
30.1
Losses and loss expenses payable
discounting
11.0
10.5
Postretirement and pension benefits
18.4
19.3
Other liabilities
13.5
12.2
Net operating loss carryforward
22.5
19.8
Capital loss carryforward
6.1
6.1
Tax credit carryforward
2.1
1.9
Other
0.5
1.1
Total deferred tax assets
104.3
101.0
Deferred tax liabilities:
Deferral of policy acquisition costs
25.4
25.7
Investments
41.5
48.0
Total deferred tax liabilities
66.9
73.7
Total net deferred tax assets before
valuation allowance
37.4
27.3
Less valuation allowance
0.3
—
Net deferred federal income taxes
$
37.1
$
27.3
The following table sets forth the
components of federal income tax expense (benefit):
Three months ended March 31
2021
2020
Income (loss) before federal income
taxes
$
5.6
$
(144.0
)
Federal income tax expense (benefit)
Deferred
2.0
(29.4
)
Total federal income tax expense
(benefit)
2.0
(29.4
)
Net income (loss)
$
3.6
$
(114.6
)
SAP Personal Insurance Segment
Results
(unaudited)
($ in millions)
Three months ended March 31,
2021
Personal Auto
Homeowners
Other Personal
Total
Net written premiums
$
89.1
$
86.2
$
17.9
$
193.2
Net earned premiums
95.7
96.3
15.8
207.8
Losses and LAE incurred:
Cat loss and ALAE
0.5
52.4
9.6
62.5
Non-cat loss and ALAE
Prior accident years non-cat loss and
ALAE
(0.8
)
(2.1
)
—
(2.9
)
Current accident year non-cat loss and
ALAE
56.9
55.1
8.1
120.1
Total non-cat loss and ALAE
56.1
53.0
8.1
117.2
Total Loss and ALAE
56.6
105.4
17.7
179.7
ULAE
8.5
8.7
1.2
18.4
Total Loss and LAE
65.1
114.1
18.9
198.1
Underwriting expenses
27.5
26.5
5.1
59.1
Net underwriting gain (loss)
$
3.1
$
(44.3
)
$
(8.2
)
$
(49.4
)
Cat loss and ALAE ratio
0.6
%
54.4
%
60.6
%
30.1
%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE
ratio
(0.9
)%
(2.2
)%
0.2
%
(1.4
)%
Current accident year non-cat loss and
ALAE ratio
59.5
%
57.3
%
51.6
%
57.7
%
Total non-cat loss and ALAE ratio
58.6
%
55.1
%
51.8
%
56.3
%
Total Loss and ALAE ratio
59.2
%
109.5
%
112.4
%
86.4
%
ULAE ratio
8.8
%
9.1
%
7.5
%
8.9
%
Total Loss and LAE ratio
68.0
%
118.6
%
119.9
%
95.3
%
Expense ratio
30.9
%
30.7
%
28.5
%
30.6
%
Combined ratio
98.9
%
149.3
%
148.4
%
125.9
%
($ in millions)
Three months ended March 31, 2020
Personal Auto
Homeowners
Other Personal
Total
Net written premiums
$
104.6
$
81.6
$
13.3
$
199.5
Net earned premiums
104.7
82.7
10.7
198.1
Losses and LAE incurred:
Cat loss and ALAE
0.5
10.7
1.5
12.7
Non-cat loss and ALAE
Prior accident years non-cat loss and
ALAE
5.2
2.2
(1.0
)
6.4
Current accident year non-cat loss and
ALAE
62.0
37.6
4.3
103.9
Total non-cat loss and ALAE
67.2
39.8
3.3
110.3
Total Loss and ALAE
67.7
50.5
4.8
123.0
ULAE
7.3
5.3
0.4
13.0
Total Loss and LAE
75.0
55.8
5.2
136.0
Underwriting expenses
32.8
25.0
4.0
61.8
Net underwriting (loss) gain
$
(3.1
)
$
1.9
$
1.5
$
0.3
Cat loss and ALAE ratio
0.4
%
13.0
%
14.0
%
6.4
%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE
ratio
5.0
%
2.7
%
(9.2
)%
3.2
%
Current accident year non-cat loss and
ALAE ratio
59.3
%
45.4
%
40.0
%
52.5
%
Total non-cat loss and ALAE ratio
64.3
%
48.1
%
30.8
%
55.7
%
Total Loss and ALAE ratio
64.7
%
61.1
%
44.8
%
62.1
%
ULAE ratio
6.9
%
6.4
%
4.0
%
6.5
%
Total Loss and LAE ratio
71.6
%
67.5
%
48.8
%
68.6
%
Expense ratio
31.4
%
30.6
%
30.0
%
31.0
%
Combined ratio
103.0
%
98.1
%
78.8
%
99.6
%
SAP Commercial Insurance Segment
Results
(unaudited)
($ in millions)
Three months ended
March 31, 2021
Commercial
Auto
Small
Commercial
Package
Middle
Market
Commercial
Workers'
Comp
Farm &
Ranch
Other
Commercial
Total
Net written premiums
$
51.3
$
35.0
$
39.3
$
16.0
$
19.9
$
4.7
$
166.2
Net earned premiums
40.9
31.7
39.6
15.2
16.5
4.8
148.7
Losses and LAE incurred:
Cat loss and ALAE
0.2
5.2
3.0
—
3.2
—
11.6
Non-cat loss and ALAE
Prior accident years non-cat loss and
ALAE
(0.6
)
(2.2
)
(8.1
)
(8.5
)
(1.4
)
(1.0
)
(21.8
)
Current accident year non-cat loss and
ALAE
25.4
19.8
25.6
9.3
5.5
1.9
87.5
Total non-cat loss and ALAE
24.8
17.6
17.5
0.8
4.1
0.9
65.7
Total Loss and ALAE
25.0
22.8
20.5
0.8
7.3
0.9
77.3
ULAE
2.6
2.4
0.8
0.7
0.7
0.1
7.3
Total Loss and LAE
27.6
25.2
21.3
1.5
8.0
1.0
84.6
Underwriting expenses
16.1
11.5
16.2
7.5
8.0
1.8
61.1
Net underwriting (loss) gain
$
(2.8
)
$
(5.0
)
$
2.1
$
6.2
$
0.5
$
2.0
$
3.0
Cat loss and ALAE ratio
0.3
%
16.5
%
7.6
%
—
%
19.7
%
—
%
7.8
%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE
ratio
(1.5
)%
(7.0
)%
(20.3
)%
(55.8
)%
(8.3
)%
(20.8
)%
(14.6
)%
Current accident year non-cat loss and
ALAE ratio
62.1
%
62.6
%
64.6
%
60.7
%
33.4
%
38.7
%
58.8
%
Total non-cat loss and ALAE ratio
60.6
%
55.6
%
44.3
%
4.9
%
25.1
%
17.9
%
44.2
%
Total Loss and ALAE ratio
60.9
%
72.1
%
51.9
%
4.9
%
44.8
%
17.9
%
52.0
%
ULAE ratio
6.3
%
7.4
%
2.0
%
4.9
%
4.1
%
2.8
%
4.9
%
Total Loss and LAE ratio
67.2
%
79.5
%
53.9
%
9.8
%
48.9
%
20.7
%
56.9
%
Expense ratio
31.6
%
32.8
%
41.2
%
46.9
%
39.9
%
39.0
%
36.8
%
Combined ratio
98.8
%
112.3
%
95.1
%
56.7
%
88.8
%
59.7
%
93.7
%
($ in millions)
Three months ended
March 31, 2020
Commercial
Auto
Small
Commercial
Package
Middle
Market
Commercial
Workers'
Comp
Farm &
Ranch
Other
Commercial
Total
Net written premiums
$
36.4
$
31.9
$
40.3
$
18.8
$
14.8
$
4.9
$
147.1
Net earned premiums
29.0
30.3
36.1
19.7
12.6
4.7
132.4
Losses and LAE incurred:
Cat loss and ALAE
0.3
3.6
24.1
—
0.9
0.2
29.1
Non-cat loss and ALAE
Prior accident years non-cat loss and
ALAE
(0.1
)
(5.4
)
(5.1
)
(4.0
)
(0.8
)
(1.4
)
(16.8
)
Current accident year non-cat loss and
ALAE
16.6
19.1
27.5
13.4
4.0
3.0
83.6
Total non-cat loss and ALAE
16.5
13.7
22.4
9.4
3.2
1.6
66.8
Total Loss and ALAE
16.8
17.3
46.5
9.4
4.1
1.8
95.9
ULAE
1.5
1.6
2.1
1.7
0.5
0.2
7.6
Total Loss and LAE
18.3
18.9
48.6
11.1
4.6
2.0
103.5
Underwriting expenses
12.7
11.8
16.7
8.9
6.7
2.1
58.9
Net underwriting (loss) gain
$
(2.0
)
$
(0.4
)
$
(29.2
)
$
(0.3
)
$
1.3
$
0.6
$
(30.0
)
Cat loss and ALAE ratio
1.1
%
12.0
%
66.7
%
—
%
7.3
%
3.8
%
22.0
%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE
ratio
(0.3
)%
(17.8
)%
(14.2
)%
(20.5
)%
(6.4
)%
(29.9
)%
(12.7
)%
Current accident year non-cat loss and
ALAE ratio
57.2
%
62.8
%
76.4
%
68.2
%
31.6
%
63.9
%
63.1
%
Total non-cat loss and ALAE ratio
56.9
%
45.0
%
62.2
%
47.7
%
25.2
%
34.0
%
50.4
%
Total Loss and ALAE ratio
58.0
%
57.0
%
128.9
%
47.7
%
32.5
%
37.8
%
72.4
%
ULAE ratio
5.2
%
5.3
%
5.8
%
8.9
%
3.9
%
4.0
%
5.8
%
Total Loss and LAE ratio
63.2
%
62.3
%
134.7
%
56.6
%
36.4
%
41.8
%
78.2
%
Expense ratio
35.0
%
37.0
%
41.4
%
47.7
%
45.5
%
41.7
%
40.1
%
Combined ratio
98.2
%
99.3
%
176.1
%
104.3
%
81.9
%
83.5
%
118.3
%
SAP Insurance Segment Results
(unaudited)
($ in millions)
2021
2020
2021
2020
Three months ended March 31
Personal &
Commercial
Personal &
Commercial
Total(1)
Total(1)
Net written premiums
$
359.4
$
346.6
$
358.7
$
346.5
Net earned premiums
356.5
330.5
355.9
330.5
Losses and LAE incurred:
Cat loss and ALAE
74.1
41.8
71.6
41.9
Non-cat loss and ALAE
Prior accident years non-cat loss and
ALAE
(24.7
)
(10.4
)
(24.6
)
(10.5
)
Current accident year non-cat loss and
ALAE
207.6
187.5
207.7
187.6
Total non-cat loss and ALAE
182.9
177.1
183.1
177.1
Total Loss and ALAE
257.0
218.9
254.7
219.0
ULAE
25.7
20.6
25.7
20.6
Total Loss and LAE
282.7
239.5
280.4
239.6
Underwriting expenses
120.2
120.7
120.3
121.0
Net underwriting loss
$
(46.4
)
$
(29.7
)
$
(44.8
)
$
(30.1
)
Cat loss and ALAE ratio
20.8
%
12.7
%
20.1
%
12.7
%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE
ratio
(6.9
)%
(3.2
)%
(6.9
)%
(3.2
)%
Current accident year non-cat loss and
ALAE ratio
58.2
%
56.8
%
58.4
%
56.8
%
Total non-cat loss and ALAE ratio
51.3
%
53.6
%
51.5
%
53.6
%
Total Loss and ALAE ratio
72.1
%
66.3
%
71.6
%
66.3
%
ULAE ratio
7.2
%
6.2
%
7.2
%
6.2
%
Total Loss and LAE ratio
79.3
%
72.5
%
78.8
%
72.5
%
Expense ratio
33.5
%
34.8
%
33.5
%
34.9
%
Combined ratio
112.8
%
107.3
%
112.3
%
107.4
%
(1)Includes specialty run-off
The following table provides a reconciliation of our statutory
underwriting results to GAAP consolidated income (loss) before
federal income taxes for the three months ended March 31, 2021 and
2020:
($ millions)
1Q 2021
1Q 2020
Segment income (loss) before federal
income taxes:
Insurance operations:
Personal insurance SAP underwriting (loss)
gain
$
(49.4
)
$
0.3
Commercial insurance SAP underwriting gain
(loss)
3.0
(30.0
)
Specialty run-off
1.6
(0.4
)
Total insurance operations
(44.8
)
(30.1
)
Investment operations:
Net investment income
17.6
18.9
Net investment gain (loss)
38.2
(135.2
)
Total investment operations
55.8
(116.3
)
All other segments income
—
0.1
Reconciling items:
GAAP adjustments
(1.3
)
5.9
Interest expense on corporate debt
(1.1
)
(1.2
)
Corporate expenses
(3.0
)
(2.4
)
Total reconciling items
(5.4
)
2.3
Total consolidated income (loss) before
federal income taxes
$
5.6
$
(144.0
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005071/en/
State Auto Financial Corporation
Media contact: Kyle Anderson, 614-917-5497
Kyle.Anderson@StateAuto.com or Investor contact: Natalie
Schoolcraft, 614-917-4341 Natalie.Schoolcraft@StateAuto.com
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