- Quarterly income of $0.21 per
share
- Quarterly GAAP combined ratio of
106.2
- Return on equity of 5.2%
- Book value per share of $21.74
In the conference call paragraph, the conference ID should
read: 51534813 (instead of 96704012).
The corrected release reads:
STATE AUTO FINANCIAL REPORTS SECOND QUARTER 2017 RESULTS
- Quarterly income of $0.21 per
share
- Quarterly GAAP combined ratio of
106.2
- Return on equity of 5.2%
- Book value per share of $21.74
State Auto Financial Corporation (NASDAQ:STFC) today reported
second quarter 2017 net income of $8.7 million, or $0.21 per
diluted share, compared to a net loss of $24.6 million, or $0.59
per diluted share, for the same 2016 period. Net loss from
operations1 per diluted share for the second quarter 2017 was $0.04
versus net loss from operations1 per diluted share of $0.69 for the
same 2016 period.
For the first six months of 2017, STFC had net income of $4.6
million, or $0.11 per diluted share, compared to a net loss of
$21.6 million, or $0.52 per diluted share, for the same 2016
period. Net loss from operations1 per diluted share for the first
six months of 2017 was $0.26 versus net loss from operations1 per
diluted share of $0.64 for the same 2016 period.
Operating Results
STFC’s GAAP combined ratio for the second quarter 2017 was 106.2
compared to 114.7 for the same 2016 period. Catastrophe losses
during the second quarter 2017 accounted for 7.9 points of the 71.9
total loss ratio points, or $25.2 million, versus 13.1 points of
the total 81.5 loss ratio points, or $42.3 million, for the same
period in 2016. Non-catastrophe losses during the second quarter
2017 included 5.1 points of favorable development relating to prior
years, or $16.3 million, versus 6.5 points of adverse development,
or $20.9 million, for the same period in 2016.
Net written premium for the second quarter 2017 decreased 1.2%
compared to the same period in 2016. By insurance segment, net
written premium for personal and commercial decreased 1.1% and
6.1%, respectively, and specialty increased 6.4%. The personal
segment decline was primarily due to a lower level of homeowners
new business counts for the second quarter 2017 compared to the
second quarter 2016. The decline in the commercial line segments
was driven by rate actions to improve profitability in commercial
auto and a reduction in new business opportunities in Workers’
Compensation due to the softening market. The growth in the
specialty insurance segment was primarily driven by an increase in
new business for E&S casualty.
STFC’s GAAP combined ratio for the first six months of 2017 was
107.7 compared to 109.4 for the same 2016 period. Catastrophe
losses during the second quarter 2017 accounted for 9.3 points of
the 72.9 total loss ratio points, or $59.5 million, versus 8.9
points of the total 76.0 loss ratio points, or $57.3 million, for
the same period in 2016. Non-catastrophe losses during the second
quarter 2017 included 3.7 points of favorable development relating
to prior years, or $23.8 million, versus 4.9 points of adverse
development, or $31.2 million, for the same period in 2016.
Net written premium for the first six months of 2017 decreased
0.5% compared to the same period in 2016. By insurance segment, net
written premium for personal and commercial decreased 0.8% and
4.1%, respectively, and specialty increased 6.5%. The trends in the
personal and commercial net written premiums are due to the same
factors discussed above for the second quarter. The growth in the
specialty insurance segment was largely driven by an increase in
new business for both E&S casualty and property.
Book Value and Return on Equity
STFC’s book value was $21.74 per share as of June 30, 2017, an
increase of $0.43 per share from STFC’s book value on Dec. 31,
2016. The increase was due to an increase in the market value of
our investment portfolio. Return on stockholders’ equity for the
twelve months ended June 30, 2017, was 5.2% compared to 0.3% for
the twelve months ended June 30, 2016.
STFC’s Chairman, President and CEO Mike LaRocco commented on the
quarter as follows:
“Second quarter 2017 was another solid step forward for State
Auto Financial Corporation, with signs of progress evident
throughout our lines of business. Following two years of rebuilding
and replacing the foundation, we’re now on a path toward profitable
growth.
“In personal auto, we’ve taken aggressive action on rates, and
are seeing improving trends as a result. It’s a similar story in
commercial auto, where we’re getting rate and improving our risk
profile. Overall in commercial lines, performance was profitable
benefitting from favorable reserve development. Specialty lines
performance greatly improved, as we continue to focus on returning
this segment to profitability.
“We continued the rollout of our new, digital-only policy
platform for personal auto and homeowners during the quarter, which
now stands at 12 states. Our independent agents are embracing the
platform and delivering strong quote volume and new business.
“Our turnaround is incomplete, but on track. Our vision is clear
and our plan is solid. With the trends we are seeing and improving
results we delivered in the quarter, I’m more confident than ever
that we’re on the path to emerging as a winner in an industry
undergoing transformative change.”
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 $0.25 per diluted
share for the second quarter 2017 and income of $0.37 year to date
2017 versus income of $0.10 for the second quarter 2016 and income
of $0.12 year to date 2016.
STFC has scheduled a conference call with interested investors
for Tuesday, August 8, at 11 a.m. ET to discuss the company’s
second quarter 2017 performance. Live and archived broadcasts of
the call can be accessed at http://www.StateAuto.com/STFC. A replay
of the call can be heard beginning at 2 p.m. ET, August 8, by
calling 855-859-2056, conference ID 51534813. Supplemental
schedules detailing the Company’s second quarter 2017 financial,
sales and underwriting results are made available on
http://www.StateAuto.com/STFC prior to the conference call.
Except for historical information, all other information in this
news release consists of forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those projected, anticipated or implied. The most significant
of these uncertainties are described in State Auto Financial's Form
10-K and Form 10-Q reports and exhibits to those reports, and
include (but are not limited to) legislative changes at both the
state and federal level, state and federal regulatory rule making
promulgations and adjudications, class action litigation involving
the insurance industry and judicial decisions affecting claims,
policy coverages and the general costs of doing business, the
impact of competition on products and pricing, inflation in the
costs of the products and services insurance pays for, product
development, geographic spread of risk, weather and weather-related
events, and other types of catastrophic events. State Auto
Financial undertakes no obligation to update or revise any
forward-looking statements.
Consolidated Statements of Income ($ in millions,
except per share amounts)
(unaudited)
Three months ended June 30 Six months ended June 30 2017 2016 2017
2016 Net premiums written $ 341.3 $ 345.6 $ 647.4
$ 650.4 Earned premiums 320.1 322.4 637.4
642.3 Net investment income 19.1 19.1 37.8 36.5 Net realized gain
on investments 15.8 6.5 23.6 7.8 Other income 0.7 0.5
1.2 1.1 Total revenue 355.7 348.5 700.0
687.7 Income (loss) before federal income
taxes 11.9 (25.1 ) 6.7 (21.3 ) Federal income tax expense
(benefit) 3.2 (0.5 ) 2.1 0.3 Net income (loss)
$ 8.7 $ (24.6 ) $ 4.6 $ (21.6 ) Earnings
(loss) per common share: - basic $ 0.21 $ (0.59 ) $ 0.11 $ (0.52 )
- diluted $ 0.21 $ (0.59 ) $ 0.11 $ (0.52 ) Loss per share from
operations (A): - basic $ (0.04 ) $ (0.69 ) $ (0.26 ) $ (0.64 ) -
diluted $ (0.04 ) $ (0.69 ) $ (0.26 ) $ (0.64 ) Weighted average
shares outstanding: - basic 42.1 41.5 42.0 41.4 - diluted 42.5 41.5
42.5 41.4 Return on average equity (LTM) 5.2 % 0.3 % Book value per
share $ 21.74 $ 21.69 Dividends paid per share $ 0.10 $ 0.10 $ 0.20
$ 0.20 Total shares outstanding 42.1 41.6 GAAP ratios: Cat
loss and ALAE ratio 7.9 13.1 9.3 8.9 Non-cat loss and LAE ratio
64.0 68.4 63.6 67.1 Loss and LAE ratio
71.9 81.5 72.9 76.0 Expense ratio 34.3 33.2 34.8
33.4 Combined ratio 106.2 114.7 107.7
109.4 (A) Reconciliation of non-GAAP financial
measure: Net loss from operations:
Net income (loss)
$ 8.7 $ (24.6 ) $ 4.6 $ (21.6 )
Less net realized gains on investments,
less applicable federal income taxes
10.3 4.2 15.4 5.1 Net loss from
operations $ (1.6 ) $ (28.8 ) $ (10.8 ) $ (26.7 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170808005324/en/
State Auto Financial CorporationInvestor contact:Tara Shull,
614-917-4478Tara.Shull@StateAuto.comorMedia contact:Kyle Anderson,
614-917-5497Kyle.Anderson@StateAuto.com
State Auto Financial (NASDAQ:STFC)
Historical Stock Chart
From Jun 2024 to Jul 2024
State Auto Financial (NASDAQ:STFC)
Historical Stock Chart
From Jul 2023 to Jul 2024