State Auto Financial Expects Storms to Impact Earnings

July 10, 2003

Ohio-based State Auto Financial Corporation has increased its estimate of May storm losses by $16 million, bringing the total to $39 to $42 million, pre-tax.

This will add seven loss ratio points to the previous estimate contained in its May 20 release, bringing that total to 17 to 18 points. High winds, tornados, hail, lightning and resulting fires caused damage in 17 of the company’s 26 operating states between May 2 and May 12.

“Based on a current review of June’s loss information, we underestimated the frequency and severity of the claims associated with these widespread storms. The numbers are unprecedented. The May storms will rank as the costliest storms of their type in State Auto’s history,” said Robert Moone, STFC chairman and CEO. “We are confident that our core underwriting and pricing strategies remain sound over the long term. Our underlying book of business, absent these storms, continues to perform consistent with the results shown in the past two quarters.”

Was this article valuable?

Here are more articles you may enjoy.