Tuesday, July 8, 2008

State Auto Notes Storm-Related Losses

State Auto Financial Corporation announced its preliminary estimates of losses due to second quarter 2008 catastrophe storm activity. The company expects second quarter 2008 results will include between $76 and $84 million in pre-tax catastrophe losses. The above range includes $3.4 million related to adverse development from prior periods.

STFC Chairman, President and CEO Bob Restrepo commented, Unfortunately the unusually harsh storm activity we saw in the first quarter this year has continued into the second quarter. This heightened level of storm activity will contribute higher than normal catastrophe losses to STFCs second quarter 2008 results. Over the past five years we have experienced an average of $27.6 million in pre-tax catastrophe losses during the second quarter, and last year we reported $20.7 million in second quarter pre-tax catastrophe losses.

During the second quarter 2008, the company experienced losses from 16 different storms that were classified as numbered catastrophes by ISO. This uncommon catastrophe activity has impacted 26 of our 33 operating states. For the first half of 2008, the company experienced losses from a total of 24 classified catastrophes, as compared to 18 and 23 for all of 2007 and 2006, respectively. While the wide spread nature of these storms has challenged our claims staff, they have performed exceptionally well, providing our policyholders the outstanding service they expect from State Auto during difficult times, added Restrepo.

STFC plans to release final second quarter 2008 financial results on Thursday, July 24, followed by a conference call at 10 a.m. Eastern time to discuss the companys second quarter performance. Live and archived broadcasts of that conference call will be posted on www.StateAuto.com.

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