COLUMBUS, Ohio -- October 27, 2003 -- State Auto Financial Corporation today reported third quarter net income increased to $15,580,000, or $0.38 per diluted share, versus $5,885,000 or $0.15 per diluted share for the same period 2002. Net operating earnings* per share were $0.36 diluted, versus $0.14 diluted, for the same period 2002.
STFC's GAAP combined ratio for the third quarter was 97.6 versus 103.8 for the third quarter of 2002. Catastrophe losses contributed a total of 6.9 points to the loss ratio during the quarter. STFC's third quarter revenue was $265,110,000, up 7.3% from $246,962,000. Third quarter net premiums written increased 5.1% over the third quarter of 2002.
Revenue for the first nine months 2003 was $781,621,000, up 9.6% from $713,144,000. For the first nine months of 2003, net income was $44,945,000, or $1.12 per diluted share, compared with $17,664,000 or $0.44 per diluted share for the same 2002 period. Year to date GAAP combined ratio for 2003 stands at 98.9 compared to 103.7 for 2002. STFC shareholders' book value per share has increased by 10.3% during the first nine months of 2003 to $13.12 per share.
"We are quite pleased to report that the third quarter of 2003 was the fourth consecutive quarter of increasing profitability when comparing year over year results. This was the most profitable third quarter in our history. Our disciplined pricing and underwriting philosophies continue to generate consistently strong core results. While catastrophes, including hurricane Isabel, added 6.9 points to our combined ratio for the quarter, we were still able to produce an underwriting profit," said STFC Chairman and CEO Bob Moone.
State Auto Financial Corporation is a regional property and casualty insurance holding company engaged primarily in writing both personal and commercial lines of insurance. The company markets its policies through more than 22,000 independent agents associated with approximately 3,400 agencies in 26 central and eastern states, excluding New York, New Jersey and the New England states.
* Net operating earnings, a non-GAAP financial measure, differ from GAAP net earnings only by the exclusion of realized capital gains or losses, net of applicable taxes, on investment activity for the period being reported. For STFC, this amounts to $0.02 for the quarter and $0.15 for 2003 year to date.
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.