State Auto Financial Reports Third Quarter Storm Losses, Negligible Direct Credit Exposures
October 06 2008 - 5:00AM
Business Wire
State Auto Financial Corporation (NASDAQ:STFC) today announced its
preliminary estimates of catastrophe losses to be reported for its
third quarter 2008, including those related to Hurricane Ike. In
addition, the company reported that it had negligible direct
exposure with respect to certain credit-impacted securities. The
company expects that its third quarter 2008 results will include
between $55 and $60 million in pre-tax catastrophe losses related
to storm activity, compared to $5.6 million in pre-tax catastrophe
losses for its third quarter 2007. Third quarter pre-tax
catastrophe losses have averaged $11.8 million for the prior five
years. Hurricane Ike was widely reported to have caused serious
damage in Texas. State Auto�s most significant losses, however,
occurred in Ohio, Indiana and Kentucky, as Ike delivered tropical
storm-force winds to parts of the Midwest. �We dispatched members
of our Catastrophe Claims Team to Texas days before Hurricane Ike
made landfall,� said STFC Chairman and CEO Bob Restrepo. �Our
adjusters remain in that region and the Midwest, working to provide
policyholders the high level of service they expect from State
Auto. What no one could have anticipated was that an even greater
number of our Midwest policyholders would be affected by that
storm. State Auto�s 24-hour Claims Contact Center has remained on
overdrive, assisting policyholders whose properties were damaged by
high winds.� �We are also very proud of the outstanding service
being delivered by our independent agents,� added Restrepo. �Their
prompt, professional response to our customers in their time of
need once again demonstrates the value of a local, independent
agent.� Additionally, STFC reported that it had no direct exposure
to Lehman Brothers Holdings Inc. or its subsidiaries (�Lehman�),
American International Group Inc. (�AIG�), and no exposure to the
common or preferred shares of Federal Home Loan Mortgage Corp.
(�Freddie Mac�) or Federal National Mortgage Association (�Fannie
Mae�). STFC�s exposure to Freddie Mac and Fannie Mae is limited to
senior debt issues and mortgage-backed pools, which amount to less
than four percent of invested assets, with no impairments
anticipated as a result. STFC plans to release final third quarter
2008 financial results on Thursday, October 23, 2008, followed by a
conference call at 10:00 Eastern time to discuss the company�s
third quarter performance. Live and archived broadcasts of that
conference call will be posted on StateAuto.com. State Auto
Financial Corporation, headquartered in Columbus, Ohio, is a super
regional property and casualty insurance holding company. The
company markets its personal and business insurance products
exclusively through independent insurance agencies in 33 states and
is proud to be a Trusted Choice� company partner. STFC stock is
traded on the NASDAQ Global Select Market, which represents the top
third of all NASDAQ listed companies. The company is one of
NASDAQ�s listed companies to be named a 2008 Mergent Dividend
Achiever for having increased its dividends for ten or more years
in succession. The State Auto Insurance Companies are rated A+
(Superior) by the A.M. Best Company. The State Auto Insurance
Companies include State Automobile Mutual, State Auto Property
& Casualty, State Auto National, State Auto Ohio, State Auto
Wisconsin, State Auto Florida, Milbank, Farmers Casualty, Meridian
Security, Meridian Citizens Mutual, Beacon National, Beacon Lloyds,
Patrons Mutual and Litchfield Mutual Fire. Additional information
on State Auto Financial Corporation and the State Auto Insurance
Companies can be found online at StateAuto.com. 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.
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