State Auto Financial Corp., headquartered in Columbus, Ohio, reported fourth quarter 2010 net income of $37.6 million, or $0.94 per diluted share, versus $14.4 million, or $0.36 per diluted share, for the fourth quarter of 2009.
STFC’s GAAP combined ratio for the fourth quarter 2010 was 97.6 versus 98.4 for the fourth quarter of 2009.
Catastrophe losses during the fourth quarter of 2010, including prior accident period development, accounted for 2.3 points of the total 62.6 loss ratio points, or $7.7 million, compared to a favorable impact of $1.2 million or 0.4 points of the total 63.2 loss ratio points for the same period in 2009.
Net written premiums for the fourth quarter 2010 increased 9.1 percent over the same period in 2009, with personal insurance increasing 1.9 personal and business insurance increasing 22.9 percent.
For the year 2010, STFC had net income of $24.5 million, or $0.62 per diluted share, compared to $10.2 million, or $0.25 per diluted share, for 2009.
The GAAP combined ratio for 2010 was 104.6 compared to 105.8 for 2009.
Catastrophe losses increased the loss ratio by 7.9 points, or $99.0 million, during 2010, compared to 7.7 points, or $90.3 million, during 2009.
The 2010 and 2009 catastrophe losses both included favorable prior accident years’ development which reduced the loss ratio by 0.3 points, or $3.3 million for 2010, and 0.9 points, or $10.9 million for 2009.
Non-catastrophe favorable reserve development reduced the loss ratio by 4.8 points, or $61.3 million for 2010, and 3.9 points, or $45.3 million for 2009.
Net written premiums for 2010 increased 9.5 percent over the same 2009 period. Personal insurance rose 6.1 percent and business insurance increased by 15.5 percent.
STFC President, Chairman and CEO Bob Restrepo said an underwriting profit for the fourth quarter 2010 was achieved through improved results in personal insurance and a lower expense ratio. Restrepo called the improvement in the company’s homeowners loss ratio “significant.”
“Excluding the impact of catastrophes, we achieved the lowest loss ratio for this line in several years,” he said. “Even with above normal catastrophes, homeowners experienced a solid underwriting profit for the quarter and improved results for the year.”
Restrepo added that improvements in State Auto’s claims operations have reduced loss adjustment expenses and efficiency initiatives “are beginning to positively affect our indemnity payout, particularly in the property lines of homeowners, fire and commercial multi-peril.”
Source: State Auto Financial Corp.
Topics Auto Profit Loss
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