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Share Name | Share Symbol | Market | Type |
---|---|---|---|
State Auto Financial Corporation | NASDAQ:STFC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 52.01 | 50.34 | 98.89 | 0 | 01:00:00 |
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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