Purchase auto insurance online

Purchase auto insurance online with absolute the best prices. Auto insurance quotes

State Auto Financial Reports Third Quarter 2017 Results | Business Wire

/
/
/
118 Views

COLUMBUS, Ohio–(BUSINESS WIRE)–State Auto Financial Corporation (NASDAQ:STFC) today reported a third

quarter 2017 net loss of $9.5 million, or $0.23 per diluted share,

compared to net income of $10.1 million, or $0.24 per diluted share, for

the same 2016 period. Net loss from operations1 per diluted

share for the third quarter 2017 was $0.54 versus net income from

operations1 per diluted share of $0.10 for the same 2016

period.

For the first nine months of 2017, STFC had a net loss of $4.9 million,

or $0.12 per diluted share, compared to a net loss of $11.5 million, or

$0.28 per diluted share, for the same 2016 period. Net loss from

operations1 per diluted share for the first nine months of

2017 was $0.80 versus a net loss from operations per diluted share of

$0.54 for the same 2016 period.

Operating Results

STFC’s GAAP combined ratio for the third quarter 2017 was 114.8 compared

to 105.0 for the same 2016 period. Catastrophe losses during the third

quarter 2017 accounted for 17.6 points of the 79.5 total loss ratio

points, or $56.1 million, versus 2.5 points of the total 71.3 loss ratio

points, or $8.1 million, for the same period in 2016. Non­catastrophe

losses during the third quarter 2017 included 2.8 points of favorable

development relating to prior years, or $9.0 million, versus 1.0 point

of adverse development, or $3.5 million, for the same period in 2016.

Net written premium for the third quarter 2017 decreased 4.3% compared

to the same period in 2016. By insurance segment, net written premium

for personal and commercial increased 7.5% and 1.8%, respectively, and

specialty decreased 42.3%. The personal segment increase was primarily

due to rate actions taken to improve the profitability in personal auto

and a higher level of new business policies for the third quarter 2017

compared to the third quarter 2016. The increase in the commercial line

segment was driven primarily by a higher level of farm & ranch, middle

market and debit mod workers’ compensation new business for the third

quarter 2017 compared to the third quarter 2016. The decline in the

specialty insurance segment was primarily driven by our decision to exit

program business.

STFC’s GAAP combined ratio for the first nine months of 2017 was 110.1

compared to 107.9 for the same 2016 period. Catastrophe losses for the

first nine months of 2017 accounted for 12.1 points of the 75.1 total

loss ratio points, or $115.7 million, versus 6.8 points of the total

74.4 loss ratio points, or $65.4 million, for the same period in 2016.

Non­catastrophe losses during the first nine months of 2017 included 3.4

points of favorable development relating to prior years, or $32.8

million, versus 3.6 points of adverse development, or $34.7 million, for

the same period in 2016.

Net written premium for the first nine months of 2017 decreased 1.8%

compared to the same period in 2016. By insurance segment, net written

premium for personal increased 1.5% and commercial and specialty

decreased 1.3% and 10.1%, respectively. The personal and specialty

segments trends were due to the same factors discussed above. The

decline in the commercial segment was driven by rate actions to improve

profitability in commercial auto and a reduction in workers’

compensation due to the softening market.

Book Value and Return on Equity

STFC’s book value was $21.28 per share as of Sept. 30, 2017, a decrease

of $0.03 per share from STFC’s book value on Dec. 31, 2016. The decrease

was driven by the increase in catastrophe losses discussed above. Return

on stockholders’ equity for the twelve months ended Sept. 30, 2017, was

3.1% compared to (0.9)% for the twelve months ended Sept. 30, 2016.

STFC’s Chairman, President and CEO Mike LaRocco commented on the quarter

as follows:

“Excluding catastrophe losses that were driven largely by our specialty

segment, we delivered another solid quarter that demonstrates the

progress we’re making in the transformation of State Auto Financial

Corporation.

“Hurricanes Harvey and Irma were the primary drivers of catastrophe

losses for third quarter 2017. Our Claims and Risk Engineering (CARE)

associates responded exceptionally well, demonstrating the care and

compassion that our customers expect and deserve.

“The continued focus on executing our strategy is producing results with

new business growth across personal lines, including five additional

states recently coming online with our new digital technology platform.

We’ve now launched the platform in 17 states, including three October

launches, and anticipate the majority of states in personal lines to be

rolled out by the end of 2017.

“In commercial lines, we successfully launched our new technology

platform in Illinois, and will move into additional states through the

end of 2017 and into 2018. We’re thrilled that our independent agency

partners are embracing both our personal and commercial lines platforms,

with strong quote volume and new business.

“Based on our previously announced strategic review of the Excess and

Surplus lines business, we have decided to exit the specialty segment

and continue to invest our capital in our core lines of business. Our

focus remains achieving our goal of profitable growth. During the third

quarter of 2017, momentum continued to build, and I remain confident

that we will succeed.”

About State Auto Financial Corporation

State Auto Financial Corporation, headquartered in Columbus, Ohio, is a

super regional property and casualty insurance holding company and is

proud to be a Trusted Choice® company partner. 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, which include retail agencies and wholesale brokers. 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.

1 Net income (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 realized capital gains and (losses), net of applicable taxes, on

investment activity for the periods being reported. For STFC, this

amounted to income of $0.31 per diluted share for the third quarter 2017

and income of $0.68 year to date 2017 versus income of $0.14 for the

third quarter 2016 and income of $0.26 year to date 2016.

STFC has scheduled a conference call with interested investors for

Thursday, Nov. 2, at 11 a.m. ET to discuss the company’s third quarter

2017 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. ET, Nov. 2, by

calling 855-859-2056, conference ID 51534853. Supplemental schedules

detailing the company’s third quarter 2017 financial, sales and

underwriting results are made available on http://www.StateAuto.com/STFC

prior to the conference call.

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.

 

Consolidated Statements of Income

($ in millions, except per share amounts)

 

 

 

 

 

 

(unaudited)

Three months ended September 30

Nine months ended September 30

2017

2016

2017

2016

Net premiums written

$

321.3

 

$

335.8

 

$

968.6

 

$

986.2

 

 

Earned premiums

319.0

325.8

956.4

968.1

Net investment income

18.7

17.6

56.5

54.1

Net realized gain on investments

20.2

8.8

43.8

16.6

Other income

0.5

 

0.6

 

1.7

 

1.7

 

Total revenue

358.4

 

352.8

 

1,058.4

 

1,040.5

 

 

(Loss) income before federal income taxes

(11.2

)

7.4

(4.5

)

(13.9

)

 

Federal income tax (benefit) expense

(1.7

)

(2.7

)

0.4

 

(2.4

)

Net (loss) income

$

(9.5

)

$

10.1

 

$

(4.9

)

$

(11.5

)

 

(Loss) income per common share:

– basic

$

(0.23

)

$

0.24

$

(0.12

)

$

(0.28

)

– diluted

$

(0.23

)

$

0.24

$

(0.12

)

$

(0.28

)

(Loss) income per share from operations (A):

– basic

$

(0.54

)

$

0.10

$

(0.80

)

$

(0.54

)

– diluted

$

(0.54

)

$

0.10

$

(0.80

)

$

(0.54

)

Weighted average shares outstanding:

– basic

42.2

41.6

42.0

41.5

– diluted

42.2

42.1

42.0

41.5

Return on average equity (LTM)

3.1

%

(0.9

)%

Book value per share

$

21.28

$

21.82

Dividends paid per share

$

0.10

$

0.10

$

0.30

$

0.30

Total shares outstanding

42.2

41.6

 

GAAP ratios:

Cat loss and ALAE ratio

17.6

2.5

12.1

6.8

Non-cat loss and LAE ratio

61.9

 

68.8

 

63.0

 

67.6

 

Loss and LAE ratio

79.5

71.3

75.1

74.4

Expense ratio

35.3

 

33.7

 

35.0

 

33.5

 

Combined ratio

114.8

 

105.0

 

110.1

 

107.9

 

 

(A) Reconciliation of non-GAAP financial measure:

Net (loss) income from operations:

Net (loss) income

$

(9.5

)

$

10.1

$

(4.9

)

$

(11.5

)

Less net realized gains on investments,

less applicable federal income taxes

13.1

 

5.7

 

28.5

 

10.8

 

Net (loss) income from operations

$

(22.6

)

$

4.4

 

$

(33.4

)

$

(22.3

)

 

adimage
  • Facebook
  • Twitter
  • Google+
  • Linkedin
  • Pinterest

Leave a Comment

Your email address will not be published. Required fields are marked *

It is main inner container footer text