Columbus, Ohio -- October 24, 2002 -- State Auto Financial Corporation (NASDAQ:STFC) reported third quarter net earnings of $5,885,000. Net reported earnings per share were $0.15, basic and diluted, versus $0.19 basic and $0.18 diluted for the same period 2001. Net operating earnings per share were $0.14, basic and diluted, versus $0.18 basic and $0.17 diluted for the same period 2001. For the first nine months of 2002, net reported earnings were $17,664,000, or $0.45 per share, $0.44 diluted, compared with $31,249,000 or $0.80 per share, $0.78 diluted for the same 2001 period. STFC's GAAP combined ratio for the third quarter was 103.8 versus 105.2 for the third quarter 2001.
STFC's third quarter revenue was $246,962,000, up 57.6% from $156,671,000. Third quarter written premium increased 69.8% over the third quarter 2001. Revenue for the first nine months 2002 was $713,144,000, up 79.3% from $397,705,000.
STFC shareholders' book value per share increased by $0.76 during the quarter to $11.60 per share, the largest quarterly increase since the third quarter of 1998. Gains in the market value of the conservative investment portfolio contributed $0.67 per share of this increase to book value.
"At State Auto we are very serious about creating and achieving objectives. Our primary goal - every quarter - is to post an underwriting profit. Thus, any quarter in which this doesn't happen, for whatever reason, is considered by management to be unsuccessful," said STFC Chairman and CEO Bob Moone. He added, "We are making great progress in reunderwriting and re-pricing the Meridian book and, at the same time, garnering rate nourishment in the 'historic State Auto' segment. These actions are expected to produce profitable underwriting results. In terms of our other goals, we are pleased with a controlled growth strategy that yielded 'same store' written premium increases of 23% in the third quarter."
State Auto Financial Corporation is a regional property and casualty insurance holding company engaged primarily in writing personal and commercial automobile, homeowners, commercial multi-peril, workers' compensation and fire insurance. The company currently markets its products through more than 22,000 agents associated with approximately 3,500 agencies in 26 states. Products are marketed primarily in the Midwest and Eastern United States, excluding New York, New Jersey and the New England states.
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.