Ohio-based State Auto Financial Corp. reported third quarter net income of $5.0 million, or $0.12 per diluted share, versus $15.6 million or $0.38 per diluted share for the same period in 2003. Net operating earnings(a) per share were $0.12 diluted, versus $0.36 diluted, for the same period in 2003.
STFC’s combined ratio for the quarter was 105.1, on a GAAP basis, versus 97.6 for the third quarter of 2003. Catastrophe losses, which included four hurricanes, accounted for $56.7 million or 22.7 loss ratio points during the third quarter of 2004. This compares to $16.9 million and 6.9 loss ratio points for the same period in 2003. STFC’s third quarter revenue was $273.1 million, up from $265.1 million for the same period in 2003.
Revenue for the first nine months of 2004 was $819.4 million, up from $781.6 million for the same period in 2003. For the first nine months of 2004, net income was $72.0 million, or $1.77 per diluted share, compared with $44.9 million or $1.12 per diluted share for the same 2003 period, an increase of 60%. STFC shareholders’ book value per share increased 12.3% during the first nine months of 2004 to $15.40 per share. The year to date GAAP combined ratio for 2004 stands at 93.9 compared to 98.9 for 2003.
“During the third quarter of this year the southeastern United States experienced an unprecedented four major hurricanes. Despite our long-standing strategy of controlling concentrations of property exposures, State Auto incurred significant losses. The lives of thousands of our policyholders have been affected by the ravages of these storms. We are extremely proud of our claim associates and their efforts to help our policyholders recover from this destruction,” said STFC Chairman and CEO Bob Moone.
“While catastrophe losses severely impacted our third quarter results, our core operating ratios continued to reflect strong performance. Excluding these losses, our combined ratio for the quarter was outstanding. Our year to date combined ratio of 93.9 allows us to be optimistic that 2004 will produce the best annual results in STFC’s history,” added Moone.
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