Insurance Company Reeling from Storm Damage Claims

http://www.businesswire.com/cgi-bin/...m&footer_file=


BW5622 JUL 09,2003 14:04 PACIFIC 17:04 EASTERN

( BW)(OH-STATE-AUTO-FINAN)(STFC) State Auto Financial Expects Storms
to Impact Earnings

Business Editors

COLUMBUS, Ohio--(BUSINESS WIRE)--July 9, 2003--State Auto
Financial Corporation (Nasdaq:STFC) today announced that it has
increased its estimate of May storm losses by $16 million, bringing
the total to $39 to $42 million, pre-tax. This will add seven loss
ratio points to the previous estimate contained in its May 20 release,
bringing that total to 17 to 18 points. High winds, tornados, hail,
lightning and resulting fires caused damage in 17 of the company's 26
operating states between May 2 and May 12.
"Based on a current review of June's loss information, we
underestimated the frequency and severity of the claims associated
with these widespread storms. The numbers are unprecedented. The May
storms will rank as the costliest storms of their type in State Auto's
history," said Robert H. Moone, STFC chairman and CEO. "We are
confident that our core underwriting and pricing strategies remain
sound over the long term. Our underlying book of business, absent
these storms, continues to perform consistent with the results shown
in the past two quarters." Moone added, "I want to again thank our
claims associates and independent agents who have provided exemplary
service to our insureds following these storms. We've said it before:
this is why we're in business, and this is why people choose State
Auto."
State Auto Financial Corporation is scheduled to release second
quarter results on July 31, 2003.

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.

--30--CM/cl*

CONTACT: State Auto Financial Corporation
Steve Johnston, 614/464-5029

KEYWORD: OHIO INDIANA
INDUSTRY KEYWORD: INSURANCE AUTOMOTIVE
SOURCE: State Auto Financial Corporation