The company saw improvement in underwriting profitability with a 95.6 combined ratio for all lines, down 8.2 points from one year ago. Quarterly investment income was $48.4 million, falling slightly from $50.5 million last year.

Ohio Casualty CEO Dan Carmichael said the company benefited from the Cost Structure Efficiency initiative, which began in 2003 and is continuing. "Processing efficiencies developed under the initiative led to the elimination of 322 staff positions in the first quarter of 2004, and nearly 500 positions for all of 2004," he said. "Approximately 1.9 points of the ratio improvement came from personnel and professional cost savings primarily related to the initiative."

However, the insurer's net written premiums decreased by 1.5 percent in the quarter, which Ohio Casualty attributed to a heightened competition.

"Competition makes the hunt for profitable growth opportunities more challenging. As a result, our net written premiums decreased 1.5 percent in the quarter," said Mr. Carmichael. "I am very pleased with our financial results, which are significantly better than the same period last year. Overall this reflects our strong commitment to disciplined underwriting and pricing even as competition increases."