State Auto Reports Lower 3Q Profit
NU Online News Service, Oct. 29, 11:24 a.m. EDT?State Auto Financial Corporation reported third-quarter net income of $5 million, substantially lower than the $15.6 million posted for the same period in 2003.[@@]
The Columbus, Ohio-based insurer blamed the "unprecedented" hurricane seasons this year for its lackluster performance this past quarter. Catastrophe losses?including the four hurricanes?accounted for $56.7 million during the third quarter, much higher than $16.9 million for the same period in 2003.
The overall combined ratio for the quarter was 105.1, on a GAAP basis, versus 97.6 for the third quarter of 2003.
"During the third quarter of this year the southeastern United States experienced an unprecedented four major hurricanes," observed State Auto Chief Executive Bob Moone. "Despite our long-standing strategy of controlling concentrations of property exposures, State Auto incurred significant losses."
Mr. Moone said that while catastrophe losses severely impacted third-quarter results, State Auto's core operating ratios continued to reflect strong performance. State Auto's year-to-date combined ratio is 93.9, he said, which keeps State Auto's management optimistic that 2004 will produce outstanding annual results. He pointed out that for the first nine months of 2004, overall net income came in at $72 million, compared with $44.9 million for the same 2003 period, an increase of 60 percent.
The net premiums written for the third quarter rose slightly for State Auto to $262.9 million, up from $261.6 million during the year-ago period. The net investment income for the third quarter also rose slightly to $18 million, up from $16 million one year ago.
State Auto Financial Corporation, headquartered in Columbus, Ohio, writes both personal and commercial lines of insurance. The company markets its products through more than 22,700 independent agents associated with more than 3,300 agencies in 26 central and eastern states.
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