|
|
|
ý
|
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Ohio
|
|
31-1324304
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
518 East Broad Street, Columbus, Ohio
|
|
43215-3976
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated file
¨
|
Accelerated filer
ý
|
Non-accelerated filer
¨
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
($ and shares in millions, except per share amount)
|
September 30, 2013
|
|
December 31, 2012
|
||||
|
(unaudited)
|
|
|
||||
Assets
|
|
|
|
||||
Fixed maturities, available-for-sale, at fair value
(amortized cost $1,802.1 and $1,776.2, respectively)
|
$
|
1,844.8
|
|
|
$
|
1,905.1
|
|
Equity securities, available-for-sale, at fair value
(cost $195.6 and $196.2, respectively)
|
251.1
|
|
|
228.4
|
|
||
Other invested assets, available-for-sale, at fair value
(cost $49.3 and $49.0, respectively)
|
76.3
|
|
|
64.4
|
|
||
Other invested assets
|
5.0
|
|
|
0.5
|
|
||
Notes receivable from affiliate
|
70.0
|
|
|
70.0
|
|
||
Total investments
|
2,247.2
|
|
|
2,268.4
|
|
||
Cash and cash equivalents
|
54.3
|
|
|
59.0
|
|
||
Accrued investment income and other assets
|
35.5
|
|
|
31.5
|
|
||
Deferred policy acquisition costs
|
98.6
|
|
|
91.7
|
|
||
Reinsurance recoverable on losses and loss expenses payable
|
10.8
|
|
|
13.5
|
|
||
Prepaid reinsurance premiums
|
4.7
|
|
|
3.9
|
|
||
Due from affiliate
|
12.6
|
|
|
—
|
|
||
Net deferred federal income taxes
|
10.0
|
|
|
1.0
|
|
||
Property and equipment, at cost
|
8.4
|
|
|
8.8
|
|
||
Total assets
|
$
|
2,482.1
|
|
|
$
|
2,477.8
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Losses and loss expenses payable (affiliates $425.6 and $435.1, respectively)
|
$
|
952.0
|
|
|
$
|
942.2
|
|
Unearned premiums (affiliates $77.7 and $81.9, respectively)
|
501.5
|
|
|
481.6
|
|
||
Notes payable (affiliates $15.5 and $15.5, respectively)
|
100.8
|
|
|
115.9
|
|
||
Postretirement and pension benefits
|
102.7
|
|
|
113.0
|
|
||
Due to affiliate
|
—
|
|
|
8.6
|
|
||
Current federal income taxes
|
0.1
|
|
|
—
|
|
||
Other liabilities
|
91.0
|
|
|
79.3
|
|
||
Total liabilities
|
1,748.1
|
|
|
1,740.6
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Class A Preferred stock (nonvoting), without par value. Authorized 2.5 shares; none issued
|
—
|
|
|
—
|
|
||
Class B Preferred stock, without par value. Authorized 2.5 shares; none issued
|
—
|
|
|
—
|
|
||
Common stock, without par value. Authorized 100.0 shares; 47.4 and 47.3 shares issued, respectively, at stated value of $2.50 per share
|
118.6
|
|
|
118.1
|
|
||
Treasury stock, 6.8 and 6.8 shares, respectively, at cost
|
(115.9
|
)
|
|
(115.8
|
)
|
||
Additional paid-in capital
|
135.4
|
|
|
131.6
|
|
||
Accumulated other comprehensive income
|
44.5
|
|
|
84.2
|
|
||
Retained earnings
|
551.4
|
|
|
519.1
|
|
||
Total stockholders’ equity
|
734.0
|
|
|
737.2
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,482.1
|
|
|
$
|
2,477.8
|
|
|
|
Three months ended
|
||||||
($ in millions, except per share amounts)
|
September 30
|
||||||
(unaudited)
|
2013
|
|
2012
|
||||
Earned premiums (ceded to affiliates $215.2 and $203.9, respectively)
|
$
|
266.0
|
|
|
$
|
261.4
|
|
Net investment income (affiliate $1.3 and $1.3, respectively)
|
18.8
|
|
|
17.2
|
|
||
Net realized gain on investments:
|
|
|
|
||||
Total other-than-temporary impairment losses
|
(0.3
|
)
|
|
(0.7
|
)
|
||
Portion of loss recognized in other comprehensive income
|
—
|
|
|
—
|
|
||
Other net realized investment gains
|
7.8
|
|
|
7.7
|
|
||
Total net realized gain on investments
|
7.5
|
|
|
7.0
|
|
||
Other income from affiliates
|
0.4
|
|
|
0.8
|
|
||
Total revenues
|
292.7
|
|
|
286.4
|
|
||
|
|
|
|
||||
Losses and loss expenses (ceded to affiliates $137.9 and $133.8, respectively)
|
178.8
|
|
|
201.4
|
|
||
Acquisition and operating expenses
|
90.9
|
|
|
86.4
|
|
||
Interest expense (affiliates $0.1 and $0.2, respectively)
|
1.6
|
|
|
1.8
|
|
||
Other expenses
|
2.7
|
|
|
2.4
|
|
||
Total expenses
|
274.0
|
|
|
292.0
|
|
||
Income (loss) before federal income taxes
|
18.7
|
|
|
(5.6
|
)
|
||
Federal income tax expense (benefit)
|
0.2
|
|
|
(0.1
|
)
|
||
Net income (loss)
|
$
|
18.5
|
|
|
$
|
(5.5
|
)
|
Earnings (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
0.46
|
|
|
$
|
(0.14
|
)
|
Diluted
|
$
|
0.45
|
|
|
$
|
(0.14
|
)
|
Dividends paid per common share
|
$
|
0.10
|
|
|
$
|
0.15
|
|
|
|
Nine months ended
|
||||||
($ in millions, except per share amounts)
|
September 30
|
||||||
(unaudited)
|
2013
|
|
2012
|
||||
Earned premiums (ceded to affiliates $639.0 and $600.6, respectively)
|
$
|
790.8
|
|
|
$
|
774.7
|
|
Net investment income (affiliate $3.7 and $3.7, respectively)
|
55.4
|
|
|
55.2
|
|
||
Net realized gain on investments:
|
|
|
|
||||
Total other-than-temporary impairment losses
|
(2.6
|
)
|
|
(2.4
|
)
|
||
Portion of loss recognized in other comprehensive income
|
—
|
|
|
—
|
|
||
Other net realized investment gains
|
18.3
|
|
|
23.2
|
|
||
Total net realized gain on investments
|
15.7
|
|
|
20.8
|
|
||
Other income from affiliates
|
1.4
|
|
|
2.7
|
|
||
Total revenues
|
863.3
|
|
|
853.4
|
|
||
|
|
|
|
||||
Losses and loss expenses (ceded to affiliates $434.0 and $457.6, respectively)
|
537.9
|
|
|
594.4
|
|
||
Acquisition and operating expenses
|
266.7
|
|
|
257.6
|
|
||
Interest expense (affiliates $0.5 and $0.6, respectively)
|
7.1
|
|
|
5.3
|
|
||
Other expenses
|
6.6
|
|
|
6.4
|
|
||
Total expenses
|
818.3
|
|
|
863.7
|
|
||
Income (loss) before federal income taxes
|
45.0
|
|
|
(10.3
|
)
|
||
Federal income tax expense (benefit)
|
0.6
|
|
|
(0.1
|
)
|
||
Net income (loss)
|
$
|
44.4
|
|
|
$
|
(10.2
|
)
|
Earnings (loss) per common share:
|
|
|
|
||||
Basic
|
$
|
1.09
|
|
|
$
|
(0.25
|
)
|
Diluted
|
$
|
1.09
|
|
|
$
|
(0.25
|
)
|
Dividends paid per common share
|
$
|
0.30
|
|
|
$
|
0.45
|
|
|
|
Three months ended
|
||||||
($ in millions, except per share amounts)
|
September 30
|
||||||
(unaudited)
|
2013
|
|
2012
|
||||
Net income (loss)
|
$
|
18.5
|
|
|
$
|
(5.5
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Net unrealized holding gain on investments:
|
|
|
|
||||
Unrealized holding gain arising during the period ended
|
12.1
|
|
|
36.7
|
|
||
Reclassification adjustments for gain realized in net income (loss)
|
(7.5
|
)
|
|
(7.0
|
)
|
||
Income tax benefit (expense)
|
1.4
|
|
|
(0.3
|
)
|
||
Total net unrealized holding gain on investments
|
6.0
|
|
|
29.4
|
|
||
Net unrecognized benefit plan obligations:
|
|
|
|
||||
Reclassification adjustments for amortization to statements of income:
|
|
|
|
||||
Negative prior service costs
|
(1.3
|
)
|
|
(1.3
|
)
|
||
Transition assets
|
—
|
|
|
0.1
|
|
||
Net loss
|
2.2
|
|
|
2.0
|
|
||
Total net unrecognized benefit plan obligations
|
0.9
|
|
|
0.8
|
|
||
Other comprehensive income, net of tax
|
6.9
|
|
|
30.2
|
|
||
Comprehensive income, net of tax
|
$
|
25.4
|
|
|
$
|
24.7
|
|
|
|
Nine months ended
|
||||||
($ in millions, except per share amounts)
|
September 30
|
||||||
(unaudited)
|
2013
|
|
2012
|
||||
Net income (loss)
|
$
|
44.4
|
|
|
$
|
(10.2
|
)
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Net unrealized holding (loss) gain on investments:
|
|
|
|
||||
Unrealized holding (loss) gain arising during the period ended
|
(35.6
|
)
|
|
59.3
|
|
||
Reclassification adjustments for gain realized in net income (loss)
|
(15.7
|
)
|
|
(20.8
|
)
|
||
Income tax benefit
|
9.0
|
|
|
—
|
|
||
Total net unrealized holding (loss) gain on investments
|
(42.3
|
)
|
|
38.5
|
|
||
Amortization of gain on derivative used in cash flow hedge
|
(0.1
|
)
|
|
(0.1
|
)
|
||
Net unrecognized benefit plan obligations:
|
|
|
|
||||
Reclassification adjustments for amortization to statements of income:
|
|
|
|
||||
Negative prior service costs
|
(4.1
|
)
|
|
(3.9
|
)
|
||
Transition assets
|
0.2
|
|
|
0.2
|
|
||
Net loss
|
6.6
|
|
|
5.8
|
|
||
Total net unrecognized benefit plan obligations
|
2.7
|
|
|
2.1
|
|
||
Other comprehensive (loss) income, net of tax
|
(39.7
|
)
|
|
40.5
|
|
||
Comprehensive income, net of tax
|
$
|
4.7
|
|
|
$
|
30.3
|
|
|
($ in millions)
|
Nine months ended
|
||||||
September 30
|
|||||||
(unaudited)
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
44.4
|
|
|
$
|
(10.2
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization, net
|
9.5
|
|
|
6.0
|
|
||
Share-based compensation
|
3.6
|
|
|
2.7
|
|
||
Net realized gain on investments
|
(15.7
|
)
|
|
(20.8
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Deferred policy acquisition costs
|
(6.9
|
)
|
|
(2.2
|
)
|
||
Accrued investment income and other assets
|
(2.7
|
)
|
|
—
|
|
||
Postretirement and pension benefits
|
(7.4
|
)
|
|
(6.8
|
)
|
||
Other liabilities and due to/from affiliates, net
|
(18.8
|
)
|
|
(17.5
|
)
|
||
Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums
|
1.9
|
|
|
10.7
|
|
||
Losses and loss expenses payable
|
9.8
|
|
|
38.8
|
|
||
Unearned premiums
|
19.9
|
|
|
21.3
|
|
||
Federal income taxes
|
0.1
|
|
|
6.4
|
|
||
Cash used in Homeowners’ Quota Share initial net unearned premium transfer
|
—
|
|
|
(75.5
|
)
|
||
Cash used in pooling changes, December 31, 2011
|
—
|
|
|
(261.4
|
)
|
||
Net cash provided by (used in) operating activities
|
37.7
|
|
|
(308.5
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of fixed maturities – available-for-sale
|
(226.6
|
)
|
|
(429.3
|
)
|
||
Purchases of equity securities – available-for-sale
|
(60.5
|
)
|
|
(112.1
|
)
|
||
Purchases of other invested assets
|
(5.2
|
)
|
|
(0.7
|
)
|
||
Maturities, calls and pay downs of fixed maturities – available-for-sale
|
122.7
|
|
|
217.5
|
|
||
Sales of fixed maturities – available-for-sale
|
77.8
|
|
|
293.9
|
|
||
Sales of equity securities – available-for-sale
|
74.1
|
|
|
64.4
|
|
||
Sales of other invested assets
|
0.5
|
|
|
0.5
|
|
||
Net additions (reductions) of property and equipment
|
0.2
|
|
|
(0.2
|
)
|
||
Net cash (used in) provided by investing activities
|
(17.0
|
)
|
|
34.0
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock
|
2.3
|
|
|
0.8
|
|
||
Payments to acquire treasury stock
|
(0.1
|
)
|
|
—
|
|
||
Payment of dividends
|
(12.1
|
)
|
|
(18.1
|
)
|
||
Payment of credit facility issue costs
|
(0.5
|
)
|
|
—
|
|
||
Proceeds from long-term debt
|
85.0
|
|
|
—
|
|
||
Redemption of long-term debt
|
(100.0
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
(25.4
|
)
|
|
(17.3
|
)
|
||
Net decrease in cash and cash equivalents
|
(4.7
|
)
|
|
(291.8
|
)
|
||
Cash and cash equivalents at beginning of period
|
59.0
|
|
|
356.0
|
|
||
Cash and cash equivalents at end of period
|
$
|
54.3
|
|
|
$
|
64.2
|
|
Supplemental disclosures:
|
|
|
|
||||
Interest paid (affiliates $0.5 and $0.6, respectively)
|
$
|
7.3
|
|
|
$
|
3.7
|
|
Federal income taxes paid (refunds received)
|
$
|
0.6
|
|
|
$
|
(6.5
|
)
|
|
|
($ millions)
|
Cost or amortized cost
|
|
Gross unrealized holding gains
|
|
Gross unrealized holding losses
|
|
Fair value
|
||||||||
September 30, 2013
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
348.9
|
|
|
$
|
18.4
|
|
|
$
|
(3.9
|
)
|
|
$
|
363.4
|
|
Obligations of states and political subdivisions
|
791.9
|
|
|
29.8
|
|
|
(16.7
|
)
|
|
805.0
|
|
||||
Corporate securities
|
326.7
|
|
|
11.6
|
|
|
(5.3
|
)
|
|
333.0
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
334.6
|
|
|
11.4
|
|
|
(2.6
|
)
|
|
343.4
|
|
||||
Total fixed maturities
|
1,802.1
|
|
|
71.2
|
|
|
(28.5
|
)
|
|
1,844.8
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
150.5
|
|
|
36.2
|
|
|
(2.1
|
)
|
|
184.6
|
|
||||
Small-cap securities
|
45.1
|
|
|
21.4
|
|
|
—
|
|
|
66.5
|
|
||||
Total equity securities
|
195.6
|
|
|
57.6
|
|
|
(2.1
|
)
|
|
251.1
|
|
||||
Other invested assets
|
49.3
|
|
|
27.0
|
|
|
—
|
|
|
76.3
|
|
||||
Total available-for-sale securities
|
$
|
2,047.0
|
|
|
$
|
155.8
|
|
|
$
|
(30.6
|
)
|
|
$
|
2,172.2
|
|
|
|
|
|
|
|
|
|
||||||||
($ millions)
|
Cost or amortized cost
|
|
Gross unrealized holding gains
|
|
Gross unrealized holding losses
|
|
Fair value
|
||||||||
December 31, 2012
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
328.2
|
|
|
$
|
38.3
|
|
|
$
|
—
|
|
|
$
|
366.5
|
|
Obligations of states and political subdivisions
|
750.4
|
|
|
50.3
|
|
|
(0.4
|
)
|
|
800.3
|
|
||||
Corporate securities
|
320.5
|
|
|
19.2
|
|
|
(1.1
|
)
|
|
338.6
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
377.1
|
|
|
24.0
|
|
|
(1.4
|
)
|
|
399.7
|
|
||||
Total fixed maturities
|
1,776.2
|
|
|
131.8
|
|
|
(2.9
|
)
|
|
1,905.1
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
152.6
|
|
|
25.0
|
|
|
(3.4
|
)
|
|
174.2
|
|
||||
Small-cap securities
|
43.6
|
|
|
10.6
|
|
|
—
|
|
|
54.2
|
|
||||
Total equity securities
|
196.2
|
|
|
35.6
|
|
|
(3.4
|
)
|
|
228.4
|
|
||||
Other invested assets
|
49.0
|
|
|
15.4
|
|
|
—
|
|
|
64.4
|
|
||||
Total available-for-sale securities
|
$
|
2,021.4
|
|
|
$
|
182.8
|
|
|
$
|
(6.3
|
)
|
|
$
|
2,197.9
|
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||
($ millions, except # of positions)
|
Fair value
|
|
Unrealized losses
|
|
Number of positions
|
|
Fair value
|
|
Unrealized losses
|
|
Number of positions
|
|
Fair value
|
|
Unrealized losses
|
|
Number of positions
|
|||||||||||||
September 30, 2013
|
||||||||||||||||||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
86.0
|
|
|
$
|
(3.9
|
)
|
|
24
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
86.0
|
|
|
$
|
(3.9
|
)
|
|
24
|
Obligations of states and political subdivisions
|
230.9
|
|
|
(16.7
|
)
|
|
81
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230.9
|
|
|
(16.7
|
)
|
|
81
|
||||||
Corporate securities
|
102.0
|
|
|
(4.8
|
)
|
|
20
|
|
5.5
|
|
|
(0.5
|
)
|
|
1
|
|
|
107.5
|
|
|
(5.3
|
)
|
|
21
|
||||||
U.S. government agencies residential mortgage-backed securities
|
54.2
|
|
|
(1.6
|
)
|
|
16
|
|
27.6
|
|
|
(1.0
|
)
|
|
11
|
|
|
81.8
|
|
|
(2.6
|
)
|
|
27
|
||||||
Total fixed maturities
|
473.1
|
|
|
(27.0
|
)
|
|
141
|
|
33.1
|
|
|
(1.5
|
)
|
|
12
|
|
|
506.2
|
|
|
(28.5
|
)
|
|
153
|
||||||
Large-cap equity securities
|
16.2
|
|
|
(1.3
|
)
|
|
3
|
|
8.9
|
|
|
(0.8
|
)
|
|
3
|
|
|
25.1
|
|
|
(2.1
|
)
|
|
6
|
||||||
Total temporarily impaired securities
|
$
|
489.3
|
|
|
$
|
(28.3
|
)
|
|
144
|
|
$
|
42.0
|
|
|
$
|
(2.3
|
)
|
|
15
|
|
|
$
|
531.3
|
|
|
$
|
(30.6
|
)
|
|
159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||
($ millions, except # of positions)
|
Fair value
|
|
Unrealized losses
|
|
Number of positions
|
|
Fair value
|
|
Unrealized losses
|
|
Number of positions
|
|
Fair value
|
|
Unrealized losses
|
|
Number of positions
|
|||||||||||||
December 31, 2012
|
||||||||||||||||||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
7.0
|
|
|
$
|
—
|
|
|
2
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
7.0
|
|
|
$
|
—
|
|
|
2
|
Obligations of states and political subdivisions
|
47.4
|
|
|
(0.4
|
)
|
|
12
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47.4
|
|
|
(0.4
|
)
|
|
12
|
||||||
Corporate securities
|
80.4
|
|
|
(1.1
|
)
|
|
17
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80.4
|
|
|
(1.1
|
)
|
|
17
|
||||||
U.S. government agencies residential mortgage-backed securities
|
23.3
|
|
|
(0.3
|
)
|
|
6
|
|
34.8
|
|
|
(1.1
|
)
|
|
13
|
|
|
58.1
|
|
|
(1.4
|
)
|
|
19
|
||||||
Total fixed maturities
|
158.1
|
|
|
(1.8
|
)
|
|
37
|
|
34.8
|
|
|
(1.1
|
)
|
|
13
|
|
|
192.9
|
|
|
(2.9
|
)
|
|
50
|
||||||
Large-cap equity securities
|
23.7
|
|
|
(2.1
|
)
|
|
4
|
|
8.9
|
|
|
(1.3
|
)
|
|
5
|
|
|
32.6
|
|
|
(3.4
|
)
|
|
9
|
||||||
Total temporarily impaired securities
|
$
|
181.8
|
|
|
$
|
(3.9
|
)
|
|
41
|
|
$
|
43.7
|
|
|
$
|
(2.4
|
)
|
|
18
|
|
|
$
|
225.5
|
|
|
$
|
(6.3
|
)
|
|
59
|
|
($ millions)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1.3
|
)
|
|
$
|
—
|
|
Small-cap securities
|
(0.3
|
)
|
|
(0.7
|
)
|
|
(1.3
|
)
|
|
(2.2
|
)
|
||||
Fixed maturities:
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||
Total other-than-temporary impairments
|
$
|
(0.3
|
)
|
|
$
|
(0.7
|
)
|
|
$
|
(2.6
|
)
|
|
$
|
(2.4
|
)
|
($ millions)
|
Amortized cost
|
|
Fair
value
|
||||
Due in 1 year or less
|
$
|
57.2
|
|
|
$
|
57.9
|
|
Due after 1 year through 5 years
|
367.1
|
|
|
385.8
|
|
||
Due after 5 years through 10 years
|
374.6
|
|
|
391.6
|
|
||
Due after 10 years
|
668.6
|
|
|
666.1
|
|
||
U.S. government agencies residential mortgage-backed securities
|
334.6
|
|
|
343.4
|
|
||
Total
|
$
|
1,802.1
|
|
|
$
|
1,844.8
|
|
|
($ millions)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Fixed maturities
|
$
|
16.2
|
|
|
$
|
14.7
|
|
|
$
|
48.2
|
|
|
$
|
49.1
|
|
Equity securities
|
1.9
|
|
|
1.5
|
|
|
4.7
|
|
|
3.5
|
|
||||
Cash and cash equivalents, and other
|
1.3
|
|
|
1.4
|
|
|
4.1
|
|
|
4.1
|
|
||||
Investment income
|
19.4
|
|
|
17.6
|
|
|
57.0
|
|
|
56.7
|
|
||||
Investment expenses
|
0.6
|
|
|
0.4
|
|
|
1.6
|
|
|
1.5
|
|
||||
Net investment income
|
$
|
18.8
|
|
|
$
|
17.2
|
|
|
$
|
55.4
|
|
|
$
|
55.2
|
|
($ millions)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Realized gains:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
$
|
0.4
|
|
|
$
|
3.3
|
|
|
$
|
1.6
|
|
|
$
|
14.0
|
|
Equity securities
|
7.9
|
|
|
4.8
|
|
|
17.9
|
|
|
11.5
|
|
||||
Other invested assets
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Total realized gains
|
8.4
|
|
|
8.1
|
|
|
19.6
|
|
|
25.5
|
|
||||
Realized losses:
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Sales
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(2.3
|
)
|
||||
OTTI
|
(0.3
|
)
|
|
(0.7
|
)
|
|
(2.6
|
)
|
|
(2.2
|
)
|
||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Sales
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
||||
OTTI
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
||||
Total realized losses
|
(0.9
|
)
|
|
(1.1
|
)
|
|
(3.9
|
)
|
|
(4.7
|
)
|
||||
Net realized gain on investments
|
$
|
7.5
|
|
|
$
|
7.0
|
|
|
$
|
15.7
|
|
|
$
|
20.8
|
|
Change in unrealized holding gains (losses), net of tax:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
$
|
(7.7
|
)
|
|
$
|
17.2
|
|
|
$
|
(86.2
|
)
|
|
$
|
20.7
|
|
Equity securities
|
5.3
|
|
|
8.5
|
|
|
23.3
|
|
|
13.4
|
|
||||
Other invested assets
|
7.0
|
|
|
4.0
|
|
|
11.6
|
|
|
4.4
|
|
||||
Deferred federal income tax (liability) benefit
|
(1.6
|
)
|
|
(10.4
|
)
|
|
18.0
|
|
|
(13.5
|
)
|
||||
Valuation allowance
|
3.0
|
|
|
10.1
|
|
|
(9.0
|
)
|
|
13.5
|
|
||||
Change in net unrealized holding gains (losses), net of tax
|
$
|
6.0
|
|
|
$
|
29.4
|
|
|
$
|
(42.3
|
)
|
|
$
|
38.5
|
|
|
•
|
Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date.
|
•
|
Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1, and it includes valuation techniques which use prices for similar assets and liabilities.
|
•
|
Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).
|
|
|
($ millions)
|
Total
|
|
Quoted prices in active markets for identical assets
(Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
||||||||
September 30, 2013
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
363.4
|
|
|
$
|
—
|
|
|
$
|
363.4
|
|
|
$
|
—
|
|
Obligations of states and political subdivisions
|
805.0
|
|
|
—
|
|
|
805.0
|
|
|
—
|
|
||||
Corporate securities
|
333.0
|
|
|
—
|
|
|
324.1
|
|
|
8.9
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
343.4
|
|
|
—
|
|
|
343.4
|
|
|
—
|
|
||||
Total fixed maturities
|
1,844.8
|
|
|
—
|
|
|
1,835.9
|
|
|
8.9
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
184.6
|
|
|
184.6
|
|
|
—
|
|
|
—
|
|
||||
Small-cap securities
|
66.5
|
|
|
66.5
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
251.1
|
|
|
251.1
|
|
|
—
|
|
|
—
|
|
||||
Other invested assets
|
76.3
|
|
|
6.3
|
|
|
70.0
|
|
|
—
|
|
||||
Total available-for-sale investments
|
$
|
2,172.2
|
|
|
$
|
257.4
|
|
|
$
|
1,905.9
|
|
|
$
|
8.9
|
|
|
|
|
|
|
|
|
|
||||||||
($ millions)
|
Total
|
|
Quoted prices in active markets for identical assets (Level 1)
|
|
Significant other observable inputs (Level 2)
|
|
Significant unobservable inputs (Level 3)
|
||||||||
December 31, 2012
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
366.5
|
|
|
$
|
—
|
|
|
$
|
366.5
|
|
|
$
|
—
|
|
Obligations of states and political subdivisions
|
800.3
|
|
|
—
|
|
|
800.3
|
|
|
—
|
|
||||
Corporate securities
|
338.6
|
|
|
—
|
|
|
330.1
|
|
|
8.5
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
399.7
|
|
|
—
|
|
|
399.7
|
|
|
—
|
|
||||
Total fixed maturities
|
1,905.1
|
|
|
—
|
|
|
1,896.6
|
|
|
8.5
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
174.2
|
|
|
174.2
|
|
|
—
|
|
|
—
|
|
||||
Small-cap securities
|
54.2
|
|
|
54.2
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
228.4
|
|
|
228.4
|
|
|
—
|
|
|
—
|
|
||||
Other invested assets
|
64.4
|
|
|
5.4
|
|
|
59.0
|
|
|
—
|
|
||||
Total available-for-sale investments
|
$
|
2,197.9
|
|
|
$
|
233.8
|
|
|
$
|
1,955.6
|
|
|
$
|
8.5
|
|
|
($ millions)
|
Fixed maturities
|
||
Balance at January 1, 2013
|
$
|
8.5
|
|
Total realized gains (losses) – included in earnings
|
—
|
|
|
Total unrealized gains (losses) – included in other comprehensive income
|
—
|
|
|
Purchases
|
0.1
|
|
|
Sales
|
—
|
|
|
Transfers into Level 3
|
—
|
|
|
Transfers out of Level 3
|
—
|
|
|
Balance at March 31, 2013
|
$
|
8.6
|
|
Total realized gains (losses) – included in earnings
|
—
|
|
|
Total unrealized gains (losses) – included in other comprehensive income
|
0.1
|
|
|
Purchases
|
0.1
|
|
|
Sales
|
—
|
|
|
Transfers into Level 3
|
—
|
|
|
Transfers out of Level 3
|
—
|
|
|
Balance at June 30, 2013
|
$
|
8.8
|
|
Total realized gains (losses) – included in earnings
|
—
|
|
|
Total unrealized gains (losses) – included in other comprehensive income
|
—
|
|
|
Purchases
|
0.1
|
|
|
Sales
|
—
|
|
|
Transfers into Level 3
|
—
|
|
|
Transfers out of Level 3
|
—
|
|
|
Balance at September 30, 2013
|
$
|
8.9
|
|
|
|
||
($ millions)
|
Fixed maturities
|
||
Balance at January 1, 2012
|
$
|
2.9
|
|
Total realized (losses) gains – included in earnings
|
(0.2
|
)
|
|
Total unrealized gains (losses) – included in other comprehensive income
|
—
|
|
|
Purchases
|
5.8
|
|
|
Sales
|
—
|
|
|
Transfers into Level 3
|
—
|
|
|
Transfers out of Level 3
|
—
|
|
|
Balance at December 31, 2012
|
$
|
8.5
|
|
|
($ millions, except interest rates)
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||
|
Carrying value
|
|
Fair value
|
|
Interest rate
|
|
Carrying value
|
|
Fair
value
|
|
Interest rate
|
||||||||||
Notes receivable from affiliate
|
$
|
70.0
|
|
|
$
|
75.7
|
|
|
7.00
|
%
|
|
$
|
70.0
|
|
|
$
|
78.3
|
|
|
7.00
|
%
|
($ millions, except interest rates)
|
September 30, 2013
|
|
December 31, 2012
|
||||||||||||||||||
|
Carrying value
|
|
Fair Value
|
|
Interest rate
|
|
Carrying value
|
|
Fair value
|
|
Interest rate
|
||||||||||
FHLB Loan due 2033:, issued $85.0, July 2013 with fixed interest
|
$
|
85.3
|
|
|
$
|
91.1
|
|
|
4.59
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
||
Senior Notes due 2013: issued $100.0, November 2003 with fixed interest
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
100.4
|
|
|
100.3
|
|
|
6.25
|
%
|
||||
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest
|
15.5
|
|
|
15.5
|
|
|
4.46
|
%
|
|
15.5
|
|
|
15.5
|
|
|
4.51
|
%
|
||||
Total notes payable
|
$
|
100.8
|
|
|
$
|
106.6
|
|
|
|
|
$
|
115.9
|
|
|
$
|
115.8
|
|
|
|
|
($ millions)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Premiums earned:
|
|
|
|
|
|
|
|
||||||||
Assumed from external insurers and reinsurers
|
$
|
1.2
|
|
|
$
|
1.1
|
|
|
$
|
2.7
|
|
|
$
|
3.1
|
|
Assumed under Pooling Arrangement
|
266.0
|
|
|
261.4
|
|
|
790.8
|
|
|
774.7
|
|
||||
Ceded to external insurers and reinsurers
|
(5.4
|
)
|
|
(6.6
|
)
|
|
(17.6
|
)
|
|
(22.1
|
)
|
||||
Ceded under Pooling Arrangement
|
(215.2
|
)
|
|
(203.9
|
)
|
|
(639.0
|
)
|
|
(600.6
|
)
|
||||
Net assumed premiums earned
|
$
|
46.6
|
|
|
$
|
52.0
|
|
|
$
|
136.9
|
|
|
$
|
155.1
|
|
Losses and loss expenses incurred:
|
|
|
|
|
|
|
|
||||||||
Assumed from external insurers and reinsurers
|
$
|
0.9
|
|
|
$
|
1.2
|
|
|
$
|
1.3
|
|
|
$
|
3.1
|
|
Assumed under Pooling Arrangement
|
179.5
|
|
|
201.7
|
|
|
540.1
|
|
|
595.3
|
|
||||
Ceded to external insurers and reinsurers
|
(0.8
|
)
|
|
(4.5
|
)
|
|
(4.9
|
)
|
|
(9.1
|
)
|
||||
Ceded under Pooling Arrangement
|
(137.8
|
)
|
|
(133.8
|
)
|
|
(434.0
|
)
|
|
(457.6
|
)
|
||||
Net assumed losses and loss expenses incurred
|
$
|
41.8
|
|
|
$
|
64.6
|
|
|
$
|
102.5
|
|
|
$
|
131.7
|
|
|
($ millions)
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||||
|
September 30
|
|
September 30
|
||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
|
|
|
%
|
||||||||||||
Amount at statutory rate
|
$
|
6.6
|
|
|
35
|
|
|
$
|
(1.9
|
)
|
|
35
|
|
|
$
|
15.8
|
|
|
35
|
|
|
$
|
(3.6
|
)
|
|
35
|
|
Tax-exempt interest and dividends received deduction
|
(2.5
|
)
|
|
(13
|
)
|
|
(2.3
|
)
|
|
41
|
|
|
(7.2
|
)
|
|
(16
|
)
|
|
(6.7
|
)
|
|
65
|
|
||||
Other, net
|
(0.3
|
)
|
|
(1
|
)
|
|
(0.1
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(3
|
)
|
||||
Valuation allowance
|
(3.6
|
)
|
|
(19
|
)
|
|
4.2
|
|
|
(75
|
)
|
|
(8.0
|
)
|
|
(18
|
)
|
|
9.9
|
|
|
(96
|
)
|
||||
Federal income tax expense (benefit) and effective rate
|
$
|
0.2
|
|
|
2
|
|
|
$
|
(0.1
|
)
|
|
3
|
|
|
$
|
0.6
|
|
|
1
|
|
|
$
|
(0.1
|
)
|
|
1
|
|
($ millions)
|
September 30, 2013
|
|
December 31, 2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Unearned premiums not currently deductible
|
$
|
34.8
|
|
|
$
|
33.4
|
|
Losses and loss expenses payable discounting
|
25.5
|
|
|
25.2
|
|
||
Postretirement and pension benefits
|
35.8
|
|
|
39.4
|
|
||
Realized loss on other-than-temporary impairment
|
9.3
|
|
|
7.5
|
|
||
Other liabilities
|
17.1
|
|
|
14.5
|
|
||
Net operating loss carryforward
|
56.9
|
|
|
66.5
|
|
||
Tax credit carryforward
|
1.8
|
|
|
0.9
|
|
||
Other
|
7.6
|
|
|
7.9
|
|
||
Total deferred tax assets
|
188.8
|
|
|
195.3
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Deferral of policy acquisition costs
|
34.5
|
|
|
32.1
|
|
||
Net unrealized holding gains on investments
|
43.8
|
|
|
61.7
|
|
||
Total deferred tax liabilities
|
78.3
|
|
|
93.8
|
|
||
Total net deferred tax assets before valuation allowance
|
110.5
|
|
|
101.5
|
|
||
Less valuation allowance
|
100.5
|
|
|
100.5
|
|
||
Net deferred federal income taxes
|
$
|
10.0
|
|
|
$
|
1.0
|
|
|
($ millions)
|
Three months ended September 30, 2013
|
|
Nine months ended September 30, 2013
|
||||
Continuing operations
|
$
|
(3.6
|
)
|
|
$
|
(8.0
|
)
|
Other comprehensive income
|
(3.4
|
)
|
|
8.0
|
|
||
Change in valuation allowance
|
$
|
(7.0
|
)
|
|
$
|
—
|
|
($ millions)
|
Pension
|
|
Postretirement
|
|
Pension
|
|
Postretirement
|
||||||||||||||||||||||||
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||||||||||||
|
September 30
|
|
September 30
|
||||||||||||||||||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||||||||||
Service cost
|
$
|
1.7
|
|
|
$
|
2.0
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
4.7
|
|
|
$
|
5.8
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Interest cost
|
2.4
|
|
|
2.5
|
|
|
0.3
|
|
|
0.3
|
|
|
7.2
|
|
|
7.5
|
|
|
0.9
|
|
|
0.9
|
|
||||||||
Expected return on plan assets
|
(3.2
|
)
|
|
(3.0
|
)
|
|
0.4
|
|
|
—
|
|
|
(9.2
|
)
|
|
(8.8
|
)
|
|
0.4
|
|
|
(0.2
|
)
|
||||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Prior service (benefits) costs
|
—
|
|
|
0.1
|
|
|
(1.3
|
)
|
|
(1.4
|
)
|
|
—
|
|
|
0.2
|
|
|
(4.1
|
)
|
|
(4.1
|
)
|
||||||||
Transition assets
|
—
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.2
|
|
||||||||
Net loss
|
2.0
|
|
|
1.8
|
|
|
0.2
|
|
|
0.2
|
|
|
6.0
|
|
|
5.2
|
|
|
0.6
|
|
|
0.6
|
|
||||||||
Net periodic cost
|
$
|
2.9
|
|
|
$
|
3.5
|
|
|
$
|
(0.3
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
8.7
|
|
|
$
|
9.9
|
|
|
$
|
(1.8
|
)
|
|
$
|
(2.6
|
)
|
|
($ millions)
The three months ended September 30, 2013 and 2012:
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Gains and Losses on Cash Flow Hedges
|
|
Benefit Plan Items
|
|
Total
|
||||||||
Beginning balance at July 1, 2013
|
$
|
75.7
|
|
|
$
|
—
|
|
|
$
|
(38.1
|
)
|
|
$
|
37.6
|
|
Other comprehensive income before reclassifications
|
13.6
|
|
|
—
|
|
|
—
|
|
|
13.6
|
|
||||
Amounts reclassified from AOCI
(a)
|
(7.6
|
)
|
|
—
|
|
|
0.9
|
|
|
(6.7
|
)
|
||||
Net current period other comprehensive income
|
6.0
|
|
|
—
|
|
|
0.9
|
|
|
6.9
|
|
||||
Ending balance at September 30, 2013
|
$
|
81.7
|
|
|
$
|
—
|
|
|
$
|
(37.2
|
)
|
|
$
|
44.5
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at July 1, 2012
|
$
|
107.8
|
|
|
$
|
0.1
|
|
|
$
|
(33.8
|
)
|
|
$
|
74.1
|
|
Other comprehensive income before reclassifications
|
36.4
|
|
|
—
|
|
|
—
|
|
|
36.4
|
|
||||
Amounts reclassified from AOCI
(a)
|
(7.0
|
)
|
|
—
|
|
|
0.8
|
|
|
(6.2
|
)
|
||||
Net current period other comprehensive income
|
29.4
|
|
|
—
|
|
|
0.8
|
|
|
30.2
|
|
||||
Ending balance at September 30, 2012
|
$
|
137.2
|
|
|
$
|
0.1
|
|
|
$
|
(33.0
|
)
|
|
$
|
104.3
|
|
(a)
|
See separate table below for details about these reclassifications
|
($ millions)
The nine months ended September 30, 2013 and 2012:
|
Unrealized Gains and Losses on Available-for-Sale Securities
|
|
Gains and Losses on Cash Flow Hedges
|
|
Benefit Plan Items
|
|
Total
|
||||||||
Beginning balance at January 1, 2013
|
$
|
124.0
|
|
|
$
|
0.1
|
|
|
$
|
(39.9
|
)
|
|
$
|
84.2
|
|
Other comprehensive income before reclassifications
|
(26.5
|
)
|
|
—
|
|
|
—
|
|
|
(26.5
|
)
|
||||
Amounts reclassified from AOCI
(a)
|
(15.8
|
)
|
|
(0.1
|
)
|
|
2.7
|
|
|
(13.2
|
)
|
||||
Net current period other comprehensive income
|
(42.3
|
)
|
|
(0.1
|
)
|
|
2.7
|
|
|
(39.7
|
)
|
||||
Ending balance at September 30, 2013
|
$
|
81.7
|
|
|
$
|
—
|
|
|
$
|
(37.2
|
)
|
|
$
|
44.5
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1, 2012
|
$
|
98.7
|
|
|
$
|
0.2
|
|
|
$
|
(35.1
|
)
|
|
$
|
63.8
|
|
Other comprehensive income before reclassifications
|
59.3
|
|
|
—
|
|
|
—
|
|
|
59.3
|
|
||||
Amounts reclassified from AOCI
(a)
|
(20.8
|
)
|
|
(0.1
|
)
|
|
2.1
|
|
|
(18.8
|
)
|
||||
Net current period other comprehensive income
|
38.5
|
|
|
(0.1
|
)
|
|
2.1
|
|
|
40.5
|
|
||||
Ending balance at September 30, 2012
|
$
|
137.2
|
|
|
$
|
0.1
|
|
|
$
|
(33.0
|
)
|
|
$
|
104.3
|
|
(a)
|
See separate table below for details about these reclassifications
|
|
($ millions)
|
|
|
|
|
|
||
Details about Accumulated Other
|
Three months ended
|
|
Affected line item in the Condensed
|
||||
Comprehensive Income Components
|
September 30
|
|
Consolidated Statements of Income
|
||||
|
2013
|
|
2012
|
|
|
||
Unrealized gains (losses) on available for sale securities
|
7.5
|
|
|
7.0
|
|
|
Realized gain (loss) on sale of securities
|
|
7.5
|
|
|
7.0
|
|
|
Total before tax
|
|
0.1
|
|
|
—
|
|
|
Tax benefit (expense)
|
|
7.6
|
|
|
7.0
|
|
|
Net of tax
|
Amortization of benefit plan items
|
|
|
|
|
|
||
Negative prior service costs
|
1.3
|
|
|
1.3
|
|
|
(a)
|
Transition assets
|
—
|
|
|
(0.1
|
)
|
|
(a)
|
Net loss
|
(2.2
|
)
|
|
(2.0
|
)
|
|
(a)
|
|
(0.9
|
)
|
|
(0.8
|
)
|
|
Total before tax
|
|
—
|
|
|
—
|
|
|
Tax benefit (expense)
|
|
(0.9
|
)
|
|
(0.8
|
)
|
|
Net of tax
|
Total reclassifications for the period
|
6.7
|
|
|
6.2
|
|
|
|
(a)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).
|
($ millions)
|
|
|
|
|
|
||||
Details about Accumulated Other
|
Nine months ended
|
|
Affected line item in the Condensed
|
||||||
Comprehensive Income Components
|
September 30
|
|
Consolidated Statements of Income
|
||||||
|
2013
|
|
2012
|
|
|
||||
Unrealized gains (losses) on available for sale securities
|
$
|
15.7
|
|
|
$
|
20.8
|
|
|
Realized gain (loss) on sale of securities
|
|
15.7
|
|
|
20.8
|
|
|
Total before tax
|
||
|
0.1
|
|
|
—
|
|
|
Tax benefit (expense)
|
||
|
15.8
|
|
|
20.8
|
|
|
Net of tax
|
||
Amortization of gain on derivative used in cash flow hedge
|
0.1
|
|
|
0.1
|
|
|
Realized gain (loss) on sale of securities
|
||
|
0.1
|
|
|
0.1
|
|
|
Total before tax
|
||
|
—
|
|
|
—
|
|
|
Tax benefit (expense)
|
||
|
0.1
|
|
|
0.1
|
|
|
Net of tax
|
||
Amortization of benefit plan items
|
|
|
|
|
|
||||
Negative prior service costs
|
4.1
|
|
|
3.9
|
|
|
(a)
|
||
Transition assets
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(a)
|
||
Net loss
|
(6.6
|
)
|
|
(5.8
|
)
|
|
(a)
|
||
|
(2.7
|
)
|
|
(2.1
|
)
|
|
Total before tax
|
||
|
—
|
|
|
—
|
|
|
Tax benefit (expense)
|
||
|
(2.7
|
)
|
|
(2.1
|
)
|
|
Net of tax
|
||
Total reclassifications for the period
|
$
|
13.2
|
|
|
$
|
18.8
|
|
|
|
(a)
|
These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).
|
|
($ and shares in millions, except per share amounts)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income (loss) for basic earnings (loss) per common share
|
$
|
18.5
|
|
|
$
|
(5.5
|
)
|
|
$
|
44.4
|
|
|
$
|
(10.2
|
)
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average shares for basic net earnings (loss) per common share
|
40.6
|
|
|
40.4
|
|
|
40.5
|
|
|
40.4
|
|
||||
Effect of dilutive share-based awards
|
0.3
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Adjusted weighted average shares for diluted net earnings (loss) per common share
|
40.9
|
|
|
40.4
|
|
|
40.7
|
|
|
40.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net earnings (loss) per common share
|
$
|
0.46
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.09
|
|
|
$
|
(0.25
|
)
|
Diluted net earnings (loss) per common share
|
$
|
0.45
|
|
|
$
|
(0.14
|
)
|
|
$
|
1.09
|
|
|
$
|
(0.25
|
)
|
(number of options and awards in millions)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Number of options
|
2.1
|
|
|
3.7
|
|
|
2.7
|
|
|
3.7
|
|
Number of RSU awards
|
0.2
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Total number of antidilutive shares and awards
|
2.3
|
|
|
3.7
|
|
|
2.8
|
|
|
3.7
|
|
|
|
($ millions)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues from external sources:
|
|
|
|
|
|
|
|
||||||||
Insurance segments
|
|
|
|
|
|
|
|
||||||||
Personal insurance
|
$
|
116.4
|
|
|
$
|
117.4
|
|
|
$
|
348.3
|
|
|
$
|
352.1
|
|
Business insurance
|
92.9
|
|
|
83.4
|
|
|
271.0
|
|
|
240.1
|
|
||||
Specialty insurance
|
56.7
|
|
|
60.6
|
|
|
171.5
|
|
|
182.5
|
|
||||
Total insurance segments
|
266.0
|
|
|
261.4
|
|
|
790.8
|
|
|
774.7
|
|
||||
Investment operations segment
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
18.8
|
|
|
17.2
|
|
|
55.4
|
|
|
55.2
|
|
||||
Net realized capital gains
|
7.5
|
|
|
7.0
|
|
|
15.7
|
|
|
20.8
|
|
||||
Total investment operations segment
|
26.3
|
|
|
24.2
|
|
|
71.1
|
|
|
76.0
|
|
||||
All other
|
0.4
|
|
|
0.8
|
|
|
1.4
|
|
|
2.7
|
|
||||
Total revenues from external sources
|
292.7
|
|
|
286.4
|
|
|
863.3
|
|
|
853.4
|
|
||||
Intersegment revenues:
|
1.4
|
|
|
5.6
|
|
|
4.0
|
|
|
10.3
|
|
||||
Total revenues
|
294.1
|
|
|
292.0
|
|
|
867.3
|
|
|
863.7
|
|
||||
Reconciling items:
|
|
|
|
|
|
|
|
||||||||
Eliminate intersegment revenues
|
(1.4
|
)
|
|
(5.6
|
)
|
|
(4.0
|
)
|
|
(10.3
|
)
|
||||
Total consolidated revenues
|
$
|
292.7
|
|
|
$
|
286.4
|
|
|
$
|
863.3
|
|
|
$
|
853.4
|
|
Segment (loss) income before federal income tax:
|
|
|
|
|
|
|
|
||||||||
Insurance segments SAP underwriting (loss) income
|
|
|
|
|
|
|
|
||||||||
Personal insurance
|
$
|
(6.0
|
)
|
|
$
|
2.9
|
|
|
$
|
(11.5
|
)
|
|
$
|
(8.8
|
)
|
Business insurance
|
(1.1
|
)
|
|
(7.4
|
)
|
|
(11.0
|
)
|
|
(40.8
|
)
|
||||
Specialty insurance
|
3.1
|
|
|
(25.1
|
)
|
|
(4.6
|
)
|
|
(37.4
|
)
|
||||
Total insurance segments
|
(4.0
|
)
|
|
(29.6
|
)
|
|
(27.1
|
)
|
|
(87.0
|
)
|
||||
Investment operations segment
|
|
|
|
|
|
|
|
||||||||
Net investment income
|
18.8
|
|
|
17.2
|
|
|
55.4
|
|
|
55.2
|
|
||||
Net realized capital gains
|
7.5
|
|
|
7.0
|
|
|
15.7
|
|
|
20.8
|
|
||||
Total investment operations segment
|
26.3
|
|
|
24.2
|
|
|
71.1
|
|
|
76.0
|
|
||||
All other
|
—
|
|
|
0.3
|
|
|
0.8
|
|
|
1.4
|
|
||||
Total segment income (loss) before tax expense (benefit)
|
22.3
|
|
|
(5.1
|
)
|
|
44.8
|
|
|
(9.6
|
)
|
||||
Reconciling items:
|
|
|
|
|
|
|
|
||||||||
GAAP expense adjustments
|
(0.4
|
)
|
|
2.4
|
|
|
11.4
|
|
|
7.7
|
|
||||
Interest expense on corporate debt
|
(1.6
|
)
|
|
(1.8
|
)
|
|
(7.1
|
)
|
|
(5.3
|
)
|
||||
Corporate expenses
|
(1.6
|
)
|
|
(1.1
|
)
|
|
(4.1
|
)
|
|
(3.1
|
)
|
||||
Total reconciling items
|
(3.6
|
)
|
|
(0.5
|
)
|
|
0.2
|
|
|
(0.7
|
)
|
||||
Total consolidated income (loss) before federal income tax expense (benefit)
|
$
|
18.7
|
|
|
$
|
(5.6
|
)
|
|
$
|
45.0
|
|
|
$
|
(10.3
|
)
|
|
|
|
STFC Pooled Companies:
|
|
|
State Auto P&C
|
51.0
|
%
|
Milbank
|
14.0
|
|
SA Ohio
|
—
|
|
Total STFC Pooled Companies
|
65.0
|
|
State Auto Mutual Pooled Companies:
|
|
|
State Auto Mutual
|
34.0
|
%
|
SA Wisconsin
|
—
|
|
Meridian Security
|
—
|
|
Meridian Citizens Mutual
|
0.5
|
|
Patrons Mutual
(1)
|
0.5
|
|
RIC
|
—
|
|
Plaza
|
—
|
|
American Compensation
|
—
|
|
Bloomington Compensation
|
—
|
|
Total State Auto Mutual Pooled Companies
|
35.0
|
|
(1)
|
Includes the pooling participation percentage of Litchfield which was merged into Patrons Mutual as of the close of business on March 31, 2013. Litchfield’s pooling participation percentage was 0.1% from January 1, 2012 to March 31, 2013
|
|
($ millions, except per share amounts)
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||||||||
GAAP Basis:
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||
Total revenues
|
$
|
292.7
|
|
|
286.4
|
|
|
$
|
863.3
|
|
|
853.4
|
|
Net income (loss)
|
$
|
18.5
|
|
|
(5.5
|
)
|
|
$
|
44.4
|
|
|
(10.2
|
)
|
Basic earnings (loss) per share
|
$
|
0.46
|
|
|
(0.14
|
)
|
|
$
|
1.09
|
|
|
(0.25
|
)
|
Diluted earnings (loss) per share
|
$
|
0.45
|
|
|
(0.14
|
)
|
|
$
|
1.09
|
|
|
(0.25
|
)
|
Stockholders’ equity
|
$
|
734.0
|
|
|
739.1
|
|
|
|
|
|
|||
Return on average equity (LTM)
|
8.9
|
%
|
|
13.6
|
|
|
|
|
|
||||
Book value per share
|
$
|
18.07
|
|
|
18.30
|
|
|
|
|
|
|||
Debt to capital ratio
|
12.1
|
|
|
13.6
|
|
|
|
|
|
||||
Cat loss and ALAE ratio
|
2.4
|
|
|
2.8
|
|
|
4.1
|
|
|
7.9
|
|
||
Non-cat loss and LAE ratio
|
64.8
|
|
|
74.3
|
|
|
63.9
|
|
|
68.8
|
|
||
Loss and LAE ratio
|
67.2
|
|
|
77.1
|
|
|
68.0
|
|
|
76.7
|
|
||
Expense ratio
|
34.2
|
|
|
33.1
|
|
|
33.7
|
|
|
33.3
|
|
||
Combined ratio
|
101.4
|
|
|
110.2
|
|
|
101.7
|
|
|
110.0
|
|
||
Premium written growth
|
(2.3
|
)%
|
|
(29.1
|
)
|
|
1.3
|
%
|
|
(29.9
|
)
|
||
Investment yield
|
3.5
|
%
|
|
3.2
|
|
|
3.5
|
%
|
|
3.4
|
|
|
Three months ended September 30
|
|
Nine months ended September 30
|
||||
SAP Basis :
|
2013
|
|
2012
|
|
2013
|
|
2012
|
Cat loss and ALAE points
|
2.4
|
|
2.8
|
|
4.1
|
|
7.9
|
Non-cat loss and ALAE
|
58.7
|
|
68.9
|
|
57.8
|
|
62.2
|
ULAE
|
6.4
|
|
5.4
|
|
6.4
|
|
6.7
|
Loss and LAE ratio
|
67.5
|
|
77.1
|
|
68.3
|
|
76.8
|
Expense ratio
|
34.9
|
|
33.7
|
|
34.3
|
|
33.4
|
Combined ratio
|
102.4
|
|
110.8
|
|
102.6
|
|
110.2
|
|
Twelve Months Ended
|
||||
|
September 30
|
||||
|
2013
|
|
2012
|
||
Net premiums written to surplus
|
1.6
|
|
|
1.7
|
|
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Three months ended September 30, 2013
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
259.9
|
|
|
$
|
48.6
|
|
|
$
|
308.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
266.0
|
|
|
43.9
|
|
|
309.9
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
6.4
|
|
|
5.0
|
|
|
11.4
|
|
|||
Non-cat loss and LAE
|
172.4
|
|
|
16.2
|
|
|
188.6
|
|
|||
Total Loss and LAE incurred
|
178.8
|
|
|
21.2
|
|
|
200.0
|
|
|||
Acquisition and operating expenses
|
90.9
|
|
|
12.7
|
|
|
103.6
|
|
|||
Net underwriting (loss) gain
|
$
|
(3.7
|
)
|
|
$
|
10.0
|
|
|
$
|
6.3
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
2.4
|
%
|
|
11.3
|
%
|
|
3.7
|
%
|
|||
Non-cat loss and LAE ratio
|
64.8
|
%
|
|
36.9
|
%
|
|
60.8
|
%
|
|||
Total Loss and LAE ratio
|
67.2
|
%
|
|
48.2
|
%
|
|
64.5
|
%
|
|||
Expense ratio
|
34.2
|
%
|
|
29.0
|
%
|
|
33.4
|
%
|
|||
Combined ratio
|
101.4
|
%
|
|
77.2
|
%
|
|
97.9
|
%
|
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Nine months ended September 30, 2013
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
808.7
|
|
|
$
|
135.9
|
|
|
$
|
944.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
790.8
|
|
|
132.8
|
|
|
923.6
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
32.2
|
|
|
19.2
|
|
|
51.4
|
|
|||
Non-cat loss and LAE
|
505.7
|
|
|
55.5
|
|
|
561.2
|
|
|||
Total Loss and LAE incurred
|
537.9
|
|
|
74.7
|
|
|
612.6
|
|
|||
Acquisition and operating expenses
|
266.7
|
|
|
38.5
|
|
|
305.2
|
|
|||
Net underwriting (loss) gain
|
$
|
(13.8
|
)
|
|
$
|
19.6
|
|
|
$
|
5.8
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
4.1
|
%
|
|
14.5
|
%
|
|
5.6
|
%
|
|||
Non-cat loss and LAE ratio
|
63.9
|
%
|
|
41.8
|
%
|
|
60.7
|
%
|
|||
Total Loss and LAE ratio
|
68.0
|
%
|
|
56.3
|
%
|
|
66.3
|
%
|
|||
Expense ratio
|
33.7
|
%
|
|
29.0
|
%
|
|
33.0
|
%
|
|||
Combined ratio
|
101.7
|
%
|
|
85.3
|
%
|
|
99.3
|
%
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Three months ended September 30, 2012
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
266.0
|
|
|
$
|
47.5
|
|
|
$
|
313.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
261.4
|
|
|
42.4
|
|
|
303.8
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
7.2
|
|
|
0.1
|
|
|
7.3
|
|
|||
Non-cat loss and LAE
|
194.2
|
|
|
17.0
|
|
|
211.2
|
|
|||
Total Loss and LAE incurred
|
201.4
|
|
|
17.1
|
|
|
218.5
|
|
|||
Acquisition and operating expenses
|
86.4
|
|
|
12.2
|
|
|
98.6
|
|
|||
Net underwriting (loss) gain
|
$
|
(26.4
|
)
|
|
$
|
13.1
|
|
|
$
|
(13.3
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
2.8
|
%
|
|
0.2
|
%
|
|
2.4
|
%
|
|||
Non-cat loss and LAE ratio
|
74.3
|
%
|
|
40.1
|
%
|
|
69.5
|
%
|
|||
Total Loss and LAE ratio
|
77.1
|
%
|
|
40.3
|
%
|
|
71.9
|
%
|
|||
Expense ratio
|
33.1
|
%
|
|
29.0
|
%
|
|
32.5
|
%
|
|||
Combined ratio
|
110.2
|
%
|
|
69.3
|
%
|
|
104.4
|
%
|
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Nine months ended September 30, 2012
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
798.7
|
|
|
$
|
131.4
|
|
|
$
|
930.1
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
774.7
|
|
|
125.9
|
|
|
900.6
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
61.2
|
|
|
47.5
|
|
|
108.7
|
|
|||
Non-cat loss and LAE
|
533.2
|
|
|
60.4
|
|
|
593.6
|
|
|||
Total Loss and LAE incurred
|
594.4
|
|
|
107.9
|
|
|
702.3
|
|
|||
Acquisition and operating expenses
|
257.6
|
|
|
36.5
|
|
|
294.1
|
|
|||
Net underwriting loss
|
$
|
(77.3
|
)
|
|
$
|
(18.5
|
)
|
|
$
|
(95.8
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
7.9
|
%
|
|
37.7
|
%
|
|
12.1
|
%
|
|||
Non-cat loss and LAE ratio
|
68.8
|
%
|
|
48.0
|
%
|
|
65.9
|
%
|
|||
Total Loss and LAE ratio
|
76.7
|
%
|
|
85.7
|
%
|
|
78.0
|
%
|
|||
Expense ratio
|
33.3
|
%
|
|
29.0
|
%
|
|
32.7
|
%
|
|||
Combined ratio
|
110.0
|
%
|
|
114.7
|
%
|
|
110.7
|
%
|
($ millions)
|
SAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Three months ended September 30, 2013
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
259.9
|
|
|
$
|
48.6
|
|
|
$
|
308.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
266.0
|
|
|
43.9
|
|
|
309.9
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
6.4
|
|
|
5.0
|
|
|
11.4
|
|
|||
Non-cat loss and ALAE
|
155.9
|
|
|
16.2
|
|
|
172.1
|
|
|||
Total Loss and ALAE
|
162.3
|
|
|
21.2
|
|
|
183.5
|
|
|||
ULAE
|
17.1
|
|
|
—
|
|
|
17.1
|
|
|||
Total Loss and ALAE incurred
|
179.4
|
|
|
21.2
|
|
|
200.6
|
|
|||
Underwriting expenses
|
90.6
|
|
|
14.1
|
|
|
104.7
|
|
|||
Net underwriting (loss) gain
|
$
|
(4.0
|
)
|
|
$
|
8.6
|
|
|
$
|
4.6
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
2.4
|
%
|
|
11.3
|
%
|
|
3.7
|
%
|
|||
Non-cat loss and ALAE ratio
|
58.7
|
%
|
|
36.9
|
%
|
|
55.6
|
%
|
|||
Total loss and ALAE ratio
|
61.1
|
%
|
|
48.2
|
%
|
|
59.3
|
%
|
|||
ULAE ratio
|
6.4
|
%
|
|
—
|
|
|
5.5
|
%
|
|||
Total loss and LAE ratio
|
67.5
|
%
|
|
48.2
|
%
|
|
64.8
|
%
|
|||
Expense ratio
|
34.9
|
%
|
|
29.0
|
%
|
|
33.9
|
%
|
|||
Combined ratio
|
102.4
|
%
|
|
77.2
|
%
|
|
98.7
|
%
|
|
($ millions)
|
SAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Nine months ended September 30, 2013
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
808.7
|
|
|
$
|
135.9
|
|
|
$
|
944.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
790.8
|
|
|
132.8
|
|
|
923.6
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
32.2
|
|
|
19.2
|
|
|
51.4
|
|
|||
Non-cat loss and ALAE
|
457.2
|
|
|
55.5
|
|
|
512.7
|
|
|||
Total Loss and ALAE
|
489.4
|
|
|
74.7
|
|
|
564.1
|
|
|||
ULAE
|
50.8
|
|
|
—
|
|
|
50.8
|
|
|||
Total Loss and ALAE incurred
|
540.2
|
|
|
74.7
|
|
|
614.9
|
|
|||
Underwriting expenses
|
277.7
|
|
|
39.4
|
|
|
317.1
|
|
|||
Net underwriting (loss) gain
|
$
|
(27.1
|
)
|
|
$
|
18.7
|
|
|
$
|
(8.4
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
4.1
|
%
|
|
14.5
|
%
|
|
5.6
|
%
|
|||
Non-cat loss and ALAE ratio
|
57.8
|
%
|
|
41.8
|
%
|
|
55.5
|
%
|
|||
Total loss and ALAE ratio
|
61.9
|
%
|
|
56.3
|
%
|
|
61.1
|
%
|
|||
ULAE ratio
|
6.4
|
%
|
|
—
|
|
|
5.5
|
%
|
|||
Total loss and LAE ratio
|
68.3
|
%
|
|
56.3
|
%
|
|
66.6
|
%
|
|||
Expense ratio
|
34.3
|
%
|
|
29.0
|
%
|
|
33.6
|
%
|
|||
Combined ratio
|
102.6
|
%
|
|
85.3
|
%
|
|
100.2
|
%
|
($ millions)
|
SAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Three months ended September 30, 2012
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
266.0
|
|
|
$
|
47.5
|
|
|
$
|
313.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
261.4
|
|
|
42.4
|
|
|
303.8
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
7.2
|
|
|
0.1
|
|
|
7.3
|
|
|||
Non-cat loss and ALAE
|
180.3
|
|
|
17.0
|
|
|
197.3
|
|
|||
Total Loss and ALAE
|
187.5
|
|
|
17.1
|
|
|
204.6
|
|
|||
ULAE
|
14.0
|
|
|
—
|
|
|
14.0
|
|
|||
Total Loss and ALAE incurred
|
201.5
|
|
|
17.1
|
|
|
218.6
|
|
|||
Underwriting expenses
|
89.5
|
|
|
13.7
|
|
|
103.2
|
|
|||
Net underwriting (loss) gain
|
$
|
(29.6
|
)
|
|
$
|
11.6
|
|
|
$
|
(18.0
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
2.8
|
%
|
|
0.2
|
%
|
|
2.4
|
%
|
|||
Non-cat loss and ALAE ratio
|
68.9
|
%
|
|
40.1
|
%
|
|
64.9
|
%
|
|||
Total loss and ALAE ratio
|
71.7
|
%
|
|
40.3
|
%
|
|
67.3
|
%
|
|||
ULAE ratio
|
5.4
|
%
|
|
—
|
|
|
4.6
|
%
|
|||
Total loss and LAE ratio
|
77.1
|
%
|
|
40.3
|
%
|
|
71.9
|
%
|
|||
Expense ratio
|
33.7
|
%
|
|
29.0
|
%
|
|
32.9
|
%
|
|||
Combined ratio
|
110.8
|
%
|
|
69.3
|
%
|
|
104.8
|
%
|
|
($ millions)
|
SAP HO QS Arrangement Cession - Overall Results
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Nine months ended September 30, 2012
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
798.7
|
|
|
$
|
131.4
|
|
|
$
|
930.1
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
774.7
|
|
|
125.9
|
|
|
900.6
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
61.2
|
|
|
47.5
|
|
|
108.7
|
|
|||
Non-cat loss and ALAE
|
481.6
|
|
|
60.4
|
|
|
542.0
|
|
|||
Total Loss and ALAE
|
542.8
|
|
|
107.9
|
|
|
650.7
|
|
|||
ULAE
|
52.2
|
|
|
—
|
|
|
52.2
|
|
|||
Total Loss and ALAE incurred
|
595.0
|
|
|
107.9
|
|
|
702.9
|
|
|||
Underwriting expenses
|
266.7
|
|
|
38.1
|
|
|
304.8
|
|
|||
Net underwriting loss
|
$
|
(87.0
|
)
|
|
$
|
(20.1
|
)
|
|
$
|
(107.1
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
7.9
|
%
|
|
37.7
|
%
|
|
12.1
|
%
|
|||
Non-cat loss and ALAE ratio
|
62.2
|
%
|
|
48.0
|
%
|
|
60.2
|
%
|
|||
Total loss and ALAE ratio
|
70.1
|
%
|
|
85.7
|
%
|
|
72.3
|
%
|
|||
ULAE ratio
|
6.7
|
%
|
|
—
|
|
|
5.8
|
%
|
|||
Total loss and LAE ratio
|
76.8
|
%
|
|
85.7
|
%
|
|
78.1
|
%
|
|||
Expense ratio
|
33.4
|
%
|
|
29.0
|
%
|
|
32.8
|
%
|
|||
Combined ratio
|
110.2
|
%
|
|
114.7
|
%
|
|
110.9
|
%
|
|
($ millions)
|
Three months ended
|
|||||||||||||||||||||||
|
September 30, 2013
|
|||||||||||||||||||||||
|
Personal
|
|
%
Ratio
|
|
Business
|
|
%
Ratio
|
|
Specialty
|
|
%
Ratio
|
|
Total
|
|
%
Ratio
|
|||||||||
Net written premiums
|
$
|
119.2
|
|
|
|
|
$
|
93.4
|
|
|
|
|
$
|
47.3
|
|
|
|
|
$
|
259.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earned premiums
|
116.4
|
|
|
|
|
92.9
|
|
|
|
|
56.7
|
|
|
|
|
266.0
|
|
|
|
|||||
Cat loss and ALAE
|
2.2
|
|
|
1.9
|
|
5.5
|
|
|
5.9
|
|
(1.3
|
)
|
|
(2.2
|
)
|
|
6.4
|
|
|
2.4
|
||||
Non-cat loss and ALAE
|
74.2
|
|
|
63.8
|
|
45.3
|
|
|
48.8
|
|
36.4
|
|
|
64.2
|
|
|
155.9
|
|
|
58.7
|
||||
ULAE
|
10.8
|
|
|
9.3
|
|
4.6
|
|
|
4.9
|
|
1.7
|
|
|
3.0
|
|
|
17.1
|
|
|
6.4
|
||||
Underwriting expenses
|
35.2
|
|
|
29.5
|
|
38.6
|
|
|
41.4
|
|
16.8
|
|
|
35.6
|
|
|
90.6
|
|
|
34.9
|
||||
SAP underwriting (loss) gain and SAP combined ratio
|
$
|
(6.0
|
)
|
|
104.5
|
|
$
|
(1.1
|
)
|
|
101.0
|
|
$
|
3.1
|
|
|
100.6
|
|
|
$
|
(4.0
|
)
|
|
102.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
($ millions)
|
Three months ended
|
|||||||||||||||||||||||
|
September 30, 2012
|
|||||||||||||||||||||||
|
Personal
|
|
%
Ratio
|
|
Business
|
|
%
Ratio
|
|
Specialty
|
|
%
Ratio
|
|
Total
|
|
%
Ratio
|
|||||||||
Net written premiums
|
$
|
120.8
|
|
|
|
|
$
|
92.6
|
|
|
|
|
$
|
52.6
|
|
|
|
|
$
|
266.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earned premiums
|
117.4
|
|
|
|
|
83.4
|
|
|
|
|
60.6
|
|
|
|
|
261.4
|
|
|
|
|||||
Cat loss and ALAE
|
2.4
|
|
|
2.0
|
|
4.2
|
|
|
5.2
|
|
0.6
|
|
|
0.9
|
|
|
7.2
|
|
|
2.8
|
||||
Non-cat loss and ALAE
|
71.3
|
|
|
60.8
|
|
43.7
|
|
|
52.2
|
|
65.3
|
|
|
107.8
|
|
|
180.3
|
|
|
68.9
|
||||
ULAE
|
7.8
|
|
|
6.7
|
|
3.9
|
|
|
4.6
|
|
2.3
|
|
|
3.8
|
|
|
14.0
|
|
|
5.4
|
||||
Underwriting expenses
|
33.0
|
|
|
27.3
|
|
39.0
|
|
|
42.1
|
|
17.5
|
|
|
33.3
|
|
|
89.5
|
|
|
33.7
|
||||
SAP underwriting gain (loss) and SAP combined ratio
|
$
|
2.9
|
|
|
96.8
|
|
$
|
(7.4
|
)
|
|
104.1
|
|
$
|
(25.1
|
)
|
|
145.8
|
|
|
$
|
(29.6
|
)
|
|
110.8
|
|
($ millions)
|
Nine months ended
|
||||||||||||||||||||||
|
September 30, 2013
|
||||||||||||||||||||||
|
Personal
|
|
%
Ratio
|
|
Business
|
|
%
Ratio
|
|
Specialty
|
|
%
Ratio
|
|
Total
|
|
%
Ratio
|
||||||||
Net written premiums
|
$
|
355.4
|
|
|
|
|
$
|
285.4
|
|
|
|
|
$
|
167.9
|
|
|
|
|
$
|
808.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned premiums
|
348.3
|
|
|
|
|
271.0
|
|
|
|
|
171.5
|
|
|
|
|
790.8
|
|
|
|
||||
Cat loss and ALAE
|
11.4
|
|
|
3.3
|
|
19.2
|
|
|
7.1
|
|
1.6
|
|
|
1.0
|
|
32.2
|
|
|
4.1
|
||||
Non-cat loss and ALAE
|
214.5
|
|
|
61.6
|
|
132.7
|
|
|
48.9
|
|
110.0
|
|
|
64.1
|
|
457.2
|
|
|
57.8
|
||||
ULAE
|
32.1
|
|
|
9.2
|
|
14.6
|
|
|
5.4
|
|
4.1
|
|
|
2.4
|
|
50.8
|
|
|
6.4
|
||||
Underwriting expenses
|
101.8
|
|
|
28.7
|
|
115.5
|
|
|
40.5
|
|
60.4
|
|
|
36.0
|
|
277.7
|
|
|
34.3
|
||||
SAP underwriting loss and SAP combined ratio
|
$
|
(11.5
|
)
|
|
102.8
|
|
$
|
(11.0
|
)
|
|
101.9
|
|
$
|
(4.6
|
)
|
|
103.5
|
|
$
|
(27.1
|
)
|
|
102.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
($ millions)
|
Nine months ended
|
||||||||||||||||||||||
|
September 30, 2012
|
||||||||||||||||||||||
|
Personal
|
|
%
Ratio
|
|
Business
|
|
%
Ratio
|
|
Specialty
|
|
%
Ratio
|
|
Total
|
|
%
Ratio
|
||||||||
Net written premiums
|
$
|
355.0
|
|
|
|
|
$
|
263.2
|
|
|
|
|
$
|
180.5
|
|
|
|
|
$
|
798.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earned premiums
|
352.1
|
|
|
|
|
240.1
|
|
|
|
|
182.5
|
|
|
|
|
774.7
|
|
|
|
||||
Cat loss and ALAE
|
25.3
|
|
|
7.2
|
|
35.0
|
|
|
14.6
|
|
0.9
|
|
|
0.5
|
|
61.2
|
|
|
7.9
|
||||
Non-cat loss and ALAE
|
208.9
|
|
|
59.3
|
|
120.9
|
|
|
50.3
|
|
151.8
|
|
|
83.2
|
|
481.6
|
|
|
62.2
|
||||
ULAE
|
31.2
|
|
|
8.9
|
|
14.8
|
|
|
6.2
|
|
6.2
|
|
|
3.4
|
|
52.2
|
|
|
6.7
|
||||
Underwriting expenses
|
95.5
|
|
|
26.9
|
|
110.2
|
|
|
41.9
|
|
61.0
|
|
|
33.8
|
|
266.7
|
|
|
33.4
|
||||
SAP underwriting loss and SAP combined ratio
|
$
|
(8.8
|
)
|
|
102.3
|
|
$
|
(40.8
|
)
|
|
113.0
|
|
$
|
(37.4
|
)
|
|
120.9
|
|
$
|
(87.0
|
)
|
|
110.2
|
|
($ millions)
|
Net Written Premiums
|
||||||||||||||||||||
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30
|
|
September 30
|
||||||||||||||||||
|
2013
|
|
2012
|
|
%
Change
|
|
2013
|
|
2012
|
|
%
Change
|
||||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal auto
|
$
|
96.5
|
|
|
$
|
98.4
|
|
|
(1.9
|
)
|
|
$
|
287.8
|
|
|
$
|
289.9
|
|
|
(0.7
|
)
|
Homeowners
|
15.8
|
|
|
15.4
|
|
|
2.6
|
|
|
45.2
|
|
|
43.0
|
|
|
5.1
|
|
||||
Other personal
|
6.9
|
|
|
7.0
|
|
|
(1.4
|
)
|
|
22.4
|
|
|
22.1
|
|
|
1.4
|
|
||||
Total personal
|
$
|
119.2
|
|
|
$
|
120.8
|
|
|
(1.3
|
)
|
|
$
|
355.4
|
|
|
$
|
355.0
|
|
|
0.1
|
|
Statutory Loss and LAE Ratios
|
($ millions)
|
%
|
|||||||||||||||||||
Three months ended September 30
|
Earned Premium
|
|
Cat Loss & ALAE
|
|
Non-Cat Loss & ALAE
|
|
Statutory Loss & LAE
|
Cat loss Ratio
|
|
Non-Cat Loss & ALAE Ratio
|
|
Total Loss and LAE Ratio
|
|||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal auto
|
$
|
94.6
|
|
|
$
|
1.0
|
|
|
$
|
64.9
|
|
|
$
|
65.9
|
|
1.0
|
|
|
68.7
|
|
69.7
|
Homeowners
|
14.4
|
|
|
1.4
|
|
|
4.9
|
|
|
6.3
|
|
10.0
|
|
|
33.8
|
|
43.8
|
||||
Other personal
|
7.4
|
|
|
(0.2
|
)
|
|
4.4
|
|
|
4.2
|
|
(3.1
|
)
|
|
60.3
|
|
57.2
|
||||
Total personal
|
116.4
|
|
|
2.2
|
|
|
74.2
|
|
|
76.4
|
|
1.9
|
|
|
63.8
|
|
65.7
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
10.8
|
|
—
|
|
|
—
|
|
9.3
|
||||
Total Loss and LAE
|
$
|
116.4
|
|
|
$
|
2.2
|
|
|
$
|
74.2
|
|
|
$
|
87.2
|
|
1.9
|
|
|
63.8
|
|
75.0
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal auto
|
$
|
95.1
|
|
|
$
|
0.3
|
|
|
$
|
62.0
|
|
|
$
|
62.3
|
|
0.3
|
|
|
65.2
|
|
65.5
|
Homeowners
|
15.3
|
|
|
(0.8
|
)
|
|
5.3
|
|
|
4.5
|
|
(5.1
|
)
|
|
34.6
|
|
29.5
|
||||
Other personal
|
7.0
|
|
|
2.9
|
|
|
4.0
|
|
|
6.9
|
|
41.2
|
|
|
57.4
|
|
98.6
|
||||
Total personal
|
117.4
|
|
|
2.4
|
|
|
71.3
|
|
|
73.7
|
|
2.0
|
|
|
60.8
|
|
62.8
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
—
|
|
|
—
|
|
6.7
|
||||
Total Loss and LAE
|
$
|
117.4
|
|
|
$
|
2.4
|
|
|
$
|
71.3
|
|
|
$
|
81.5
|
|
2.0
|
|
|
60.8
|
|
69.5
|
|
Statutory Loss and LAE Ratios
|
($ millions)
|
%
|
||||||||||||||||||
Nine months ended September 30
|
Earned Premium
|
|
Cat Loss & ALAE
|
|
Non-Cat Loss & ALAE
|
|
Statutory Loss & LAE
|
Cat loss Ratio
|
|
Non-Cat Loss & ALAE Ratio
|
|
Total Loss and LAE Ratio
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal auto
|
$
|
284.8
|
|
|
$
|
4.6
|
|
|
$
|
187.5
|
|
|
$
|
192.1
|
|
1.6
|
|
65.8
|
|
67.4
|
Homeowners
|
41.4
|
|
|
5.8
|
|
|
17.0
|
|
|
22.8
|
|
14.1
|
|
41.2
|
|
55.3
|
||||
Other personal
|
22.1
|
|
|
1.0
|
|
|
10.0
|
|
|
11.0
|
|
4.4
|
|
45.5
|
|
49.9
|
||||
Total personal
|
348.3
|
|
|
11.4
|
|
|
214.5
|
|
|
225.9
|
|
3.3
|
|
61.6
|
|
64.9
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
32.1
|
|
—
|
|
—
|
|
9.2
|
||||
Total Loss and LAE
|
$
|
348.3
|
|
|
$
|
11.4
|
|
|
$
|
214.5
|
|
|
$
|
258.0
|
|
3.3
|
|
61.6
|
|
74.1
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal auto
|
$
|
286.9
|
|
|
$
|
10.5
|
|
|
$
|
179.3
|
|
|
$
|
189.8
|
|
3.6
|
|
62.5
|
|
66.1
|
Homeowners
|
44.4
|
|
|
6.9
|
|
|
20.2
|
|
|
27.1
|
|
15.6
|
|
45.6
|
|
61.2
|
||||
Other personal
|
20.8
|
|
|
7.9
|
|
|
9.4
|
|
|
17.3
|
|
37.7
|
|
45.2
|
|
82.9
|
||||
Total personal
|
352.1
|
|
|
25.3
|
|
|
208.9
|
|
|
234.2
|
|
7.2
|
|
59.3
|
|
66.5
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
31.2
|
|
—
|
|
—
|
|
8.9
|
||||
Total Loss and LAE
|
$
|
352.1
|
|
|
$
|
25.3
|
|
|
$
|
208.9
|
|
|
$
|
265.4
|
|
7.2
|
|
59.3
|
|
75.4
|
•
|
CustomFit
SM
homeowners
: We had previously implemented the use of our by-peril rating approach, CustomFit homeowners, in states that represent approximately 80% of our homeowners' premium and 86% of our five-year wind/hail losses. During 2012, our CustomFit homeowners was operational in 20 of our 28 active states. During 2012, we developed a second generation CustomFit homeowners product, which enhances our ability to model and price appropriately for non-weather related losses. This second generation of CustomFit homeowners was deployed in two states in late 2012 and we are on target to add two more states in 2013.
|
•
|
Evaluating, monitoring and terminating unprofitable agencies:
We are aggressively evaluating and monitoring unprofitable agencies, which includes reviewing existing policies, implementing tighter new business and renewal guidelines and applying other loss mitigation tools. In 2012, we terminated the personal lines relationship with a
|
|
•
|
Insurance to value:
We continue to focus on insurance to value so that our insureds maintain an amount of coverage sufficient to replace their home and contents in the case of a total loss. Proper insurance to value ensures that our premiums are commensurate with our loss exposure. During
2013, we integrated our insurance to value review with our underwriting workflow. We developed a model that allows us to identify homeowner risks that have a high probability of having insurance to value gaps.
|
•
|
Wind and hail deductibles:
We continue to analyze each state's wind and hail deductible, and all peril deductibles, at each annual rate review, making adjustments where necessary. We have implemented mandatory wind and hail deductibles in all targeted catastrophe prone states.
|
($ millions)
|
SAP HO QS Arrangement Cession - Homeowners
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Three months ended September 30, 2013
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
15.8
|
|
|
$
|
48.6
|
|
|
$
|
64.4
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
14.4
|
|
|
43.9
|
|
|
58.3
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
1.4
|
|
|
5.0
|
|
|
6.4
|
|
|||
Non-cat loss and ALAE
|
4.9
|
|
|
16.2
|
|
|
21.1
|
|
|||
Total Loss and ALAE incurred
|
$
|
6.3
|
|
|
$
|
21.2
|
|
|
$
|
27.5
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
10.0
|
%
|
|
11.3
|
%
|
|
11.0
|
%
|
|||
Non-cat loss and ALAE ratio
|
33.8
|
%
|
|
36.9
|
%
|
|
36.1
|
%
|
|||
Total Loss and ALAE ratio
|
43.8
|
%
|
|
48.2
|
%
|
|
47.1
|
%
|
|
($ millions)
|
SAP HO QS Arrangement Cession - Homeowners
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Nine months ended September 30, 2013
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
45.2
|
|
|
$
|
135.9
|
|
|
$
|
181.1
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
41.4
|
|
|
132.8
|
|
|
174.2
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
5.8
|
|
|
19.2
|
|
|
25.0
|
|
|||
Non-cat loss and ALAE
|
17.0
|
|
|
55.5
|
|
|
72.5
|
|
|||
Total Loss and ALAE incurred
|
$
|
22.8
|
|
|
$
|
74.7
|
|
|
$
|
97.5
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
14.1
|
%
|
|
14.5
|
%
|
|
14.4
|
%
|
|||
Non-cat loss and ALAE ratio
|
41.2
|
%
|
|
41.8
|
%
|
|
41.6
|
%
|
|||
Total Loss and ALAE ratio
|
55.3
|
%
|
|
56.3
|
%
|
|
56.0
|
%
|
($ millions)
|
SAP HO QS Arrangement Cession - Homeowners
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Three months ended September 30, 2012
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
15.4
|
|
|
$
|
47.5
|
|
|
$
|
62.9
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
15.3
|
|
|
42.4
|
|
|
57.7
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
(0.8
|
)
|
|
0.1
|
|
|
(0.7
|
)
|
|||
Non-cat loss and ALAE
|
5.3
|
|
|
17.0
|
|
|
22.3
|
|
|||
Total Loss and ALAE incurred
|
$
|
4.5
|
|
|
$
|
17.1
|
|
|
$
|
21.6
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
(5.1
|
)%
|
|
0.2
|
%
|
|
(1.2
|
)%
|
|||
Non-cat loss and ALAE ratio
|
34.6
|
%
|
|
40.1
|
%
|
|
38.6
|
%
|
|||
Total Loss and ALAE ratio
|
29.5
|
%
|
|
40.3
|
%
|
|
37.4
|
%
|
|
($ millions)
|
SAP HO QS Arrangement Cession - Homeowners
|
||||||||||
|
|
|
|
|
Pro-Forma
|
||||||
|
|
|
|
|
without HO QS
|
||||||
Nine months ended September 30, 2012
|
As Reported
|
|
HO QS Cession
|
|
Cession
|
||||||
Net written premiums
|
$
|
43.0
|
|
|
$
|
131.4
|
|
|
$
|
174.4
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
44.4
|
|
|
125.9
|
|
|
170.3
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
6.9
|
|
|
47.5
|
|
|
54.4
|
|
|||
Non-cat loss and ALAE
|
20.2
|
|
|
60.4
|
|
|
80.6
|
|
|||
Total Loss and ALAE incurred
|
$
|
27.1
|
|
|
$
|
107.9
|
|
|
$
|
135.0
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
15.6
|
%
|
|
37.7
|
%
|
|
31.9
|
%
|
|||
Non-cat loss and ALAE ratio
|
45.6
|
%
|
|
48.0
|
%
|
|
47.3
|
%
|
|||
Total Loss and ALAE ratio
|
61.2
|
%
|
|
85.7
|
%
|
|
79.2
|
%
|
($ millions)
|
Net Written Premiums
|
|||||||||||||||||||
|
Three months ended
|
|
Nine months ended
|
|||||||||||||||||
|
September 30
|
|
September 30
|
|||||||||||||||||
|
2013
|
|
2012
|
|
%
Change
|
|
2013
|
|
2012
|
|
%
Change
|
|||||||||
Business insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial auto
|
$
|
23.7
|
|
|
$
|
20.6
|
|
|
15.0
|
|
|
$
|
74.2
|
|
|
$
|
66.8
|
|
|
11.1
|
Commercial multi-peril
|
28.8
|
|
|
25.5
|
|
|
12.9
|
|
|
85.6
|
|
|
75.4
|
|
|
13.5
|
||||
Fire & allied lines
|
19.6
|
|
|
19.5
|
|
|
0.5
|
|
|
58.6
|
|
|
56.2
|
|
|
4.3
|
||||
Other & product liability
|
16.9
|
|
|
22.5
|
|
|
(24.9
|
)
|
|
53.1
|
|
|
51.3
|
|
|
3.5
|
||||
Other commercial
|
4.4
|
|
|
4.5
|
|
|
(2.2
|
)
|
|
13.9
|
|
|
13.5
|
|
|
3.0
|
||||
Total business
|
$
|
93.4
|
|
|
$
|
92.6
|
|
|
0.9
|
|
|
$
|
285.4
|
|
|
$
|
263.2
|
|
|
8.4
|
|
Statutory Loss and LAE Ratios
|
($ millions)
|
%
|
||||||||||||||||||
Three months ended September 30
|
Earned Premium
|
|
Cat Loss & ALAE
|
|
Non-Cat Loss & ALAE
|
|
Statutory Loss & LAE
|
Cat loss Ratio
|
|
Non-Cat Loss & ALAE Ratio
|
|
Total Loss and LAE Ratio
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Business insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial auto
|
$
|
23.7
|
|
|
$
|
0.1
|
|
|
$
|
14.2
|
|
|
$
|
14.3
|
|
0.3
|
|
60.1
|
|
60.4
|
Commercial multi-peril
|
27.2
|
|
|
2.1
|
|
|
12.9
|
|
|
15.0
|
|
7.6
|
|
47.7
|
|
55.3
|
||||
Fire & allied lines
|
19.2
|
|
|
3.0
|
|
|
6.4
|
|
|
9.4
|
|
15.8
|
|
33.1
|
|
48.9
|
||||
Other & product liability
|
18.3
|
|
|
—
|
|
|
10.0
|
|
|
10.0
|
|
—
|
|
54.7
|
|
54.7
|
||||
Other commercial
|
4.5
|
|
|
0.3
|
|
|
1.8
|
|
|
2.1
|
|
6.7
|
|
38.9
|
|
45.6
|
||||
Total business
|
92.9
|
|
|
5.5
|
|
|
45.3
|
|
|
50.8
|
|
5.9
|
|
48.8
|
|
54.7
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
—
|
|
—
|
|
4.9
|
||||
Total Loss and LAE
|
$
|
92.9
|
|
|
$
|
5.5
|
|
|
$
|
45.3
|
|
|
$
|
55.4
|
|
5.9
|
|
48.8
|
|
59.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Business insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial auto
|
$
|
20.7
|
|
|
$
|
0.1
|
|
|
$
|
13.8
|
|
|
$
|
13.9
|
|
0.7
|
|
66.5
|
|
67.2
|
Commercial multi-peril
|
23.9
|
|
|
0.7
|
|
|
12.1
|
|
|
12.8
|
|
3.0
|
|
50.6
|
|
53.6
|
||||
Fire & allied lines
|
18.6
|
|
|
3.3
|
|
|
4.7
|
|
|
8.0
|
|
18.0
|
|
25.0
|
|
43.0
|
||||
Other & product liability
|
15.6
|
|
|
—
|
|
|
12.0
|
|
|
12.0
|
|
—
|
|
77.2
|
|
77.2
|
||||
Other commercial
|
4.6
|
|
|
0.1
|
|
|
1.1
|
|
|
1.2
|
|
2.0
|
|
21.7
|
|
23.7
|
||||
Total business
|
83.4
|
|
|
4.2
|
|
|
43.7
|
|
|
47.9
|
|
5.2
|
|
52.2
|
|
57.4
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
3.9
|
|
—
|
|
—
|
|
4.6
|
||||
Total Loss and LAE
|
$
|
83.4
|
|
|
$
|
4.2
|
|
|
$
|
43.7
|
|
|
$
|
51.8
|
|
5.2
|
|
52.2
|
|
62.0
|
|
Statutory Loss and LAE Ratios
|
($ millions)
|
%
|
||||||||||||||||||
Nine months ended September 30
|
Earned Premium
|
|
Cat Loss & ALAE
|
|
Non-Cat Loss & ALAE
|
|
Statutory Loss & LAE
|
Cat loss Ratio
|
|
Non-Cat Loss & ALAE Ratio
|
|
Total Loss and LAE Ratio
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Business insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial auto
|
$
|
69.2
|
|
|
$
|
0.8
|
|
|
$
|
41.5
|
|
|
$
|
42.3
|
|
1.2
|
|
59.9
|
|
61.1
|
Commercial multi-peril
|
79.9
|
|
|
10.0
|
|
|
40.0
|
|
|
50.0
|
|
12.5
|
|
50.1
|
|
62.6
|
||||
Fire & allied lines
|
57.5
|
|
|
8.1
|
|
|
17.5
|
|
|
25.6
|
|
14.0
|
|
30.5
|
|
44.5
|
||||
Other & product liability
|
50.8
|
|
|
—
|
|
|
27.3
|
|
|
27.3
|
|
—
|
|
53.6
|
|
53.6
|
||||
Other commercial
|
13.6
|
|
|
0.3
|
|
|
6.4
|
|
|
6.7
|
|
2.4
|
|
46.8
|
|
49.2
|
||||
Total business
|
271.0
|
|
|
19.2
|
|
|
132.7
|
|
|
151.9
|
|
7.1
|
|
48.9
|
|
56.0
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
14.6
|
|
—
|
|
—
|
|
5.4
|
||||
Total Loss and LAE
|
$
|
271.0
|
|
|
$
|
19.2
|
|
|
$
|
132.7
|
|
|
$
|
166.5
|
|
7.1
|
|
48.9
|
|
61.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Business insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Commercial auto
|
$
|
59.7
|
|
|
$
|
0.7
|
|
|
$
|
36.7
|
|
|
$
|
37.4
|
|
1.2
|
|
61.4
|
|
62.6
|
Commercial multi-peril
|
69.2
|
|
|
12.2
|
|
|
37.9
|
|
|
50.1
|
|
17.7
|
|
54.8
|
|
72.5
|
||||
Fire & allied lines
|
55.6
|
|
|
21.9
|
|
|
16.6
|
|
|
38.5
|
|
39.4
|
|
29.8
|
|
69.2
|
||||
Other & product liability
|
42.4
|
|
|
—
|
|
|
26.1
|
|
|
26.1
|
|
—
|
|
61.5
|
|
61.5
|
||||
Other commercial
|
13.2
|
|
|
0.2
|
|
|
3.6
|
|
|
3.8
|
|
1.1
|
|
27.4
|
|
28.5
|
||||
Total business
|
240.1
|
|
|
35.0
|
|
|
120.9
|
|
|
155.9
|
|
14.6
|
|
50.3
|
|
64.9
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
14.8
|
|
—
|
|
—
|
|
6.2
|
||||
Total Loss and LAE
|
$
|
240.1
|
|
|
$
|
35.0
|
|
|
$
|
120.9
|
|
|
$
|
170.7
|
|
14.6
|
|
50.3
|
|
71.1
|
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30
|
|
September 30
|
||||||||||||||||||
($ millions)
|
2013
|
|
2012
|
|
%
Change |
|
2013
|
|
2012
|
|
%
Change |
||||||||||
Net written premiums:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Business insurance segment
|
$
|
93.4
|
|
|
$
|
92.6
|
|
|
0.9
|
|
|
$
|
285.4
|
|
|
$
|
263.2
|
|
|
8.4
|
|
Return of ceded premium
|
—
|
|
|
(7.2
|
)
|
|
(100.0
|
)
|
|
—
|
|
|
(7.2
|
)
|
|
(100.0
|
)
|
||||
Pro forma net written premiums
|
$
|
93.4
|
|
|
$
|
85.4
|
|
|
9.4
|
|
|
$
|
285.4
|
|
|
$
|
256.0
|
|
|
11.5
|
|
|
($ millions)
|
Net Written Premiums
|
||||||||||||||||||||
|
Three months ended
|
|
Nine months ended
|
||||||||||||||||||
|
September 30
|
|
September 30
|
||||||||||||||||||
|
2013
|
|
2012
|
|
%
Change
|
|
2013
|
|
2012
|
|
%
Change
|
||||||||||
Specialty insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Excess & Surplus property
|
$
|
3.1
|
|
|
$
|
2.3
|
|
|
34.8
|
|
|
$
|
26.1
|
|
|
$
|
18.2
|
|
|
43.4
|
|
Excess & Surplus casualty
|
10.3
|
|
|
9.7
|
|
|
6.2
|
|
|
31.1
|
|
|
27.2
|
|
|
14.3
|
|
||||
Programs
|
17.5
|
|
|
23.9
|
|
|
(26.8
|
)
|
|
56.5
|
|
|
81.5
|
|
|
(30.7
|
)
|
||||
Workers’ compensation
|
16.4
|
|
|
16.7
|
|
|
(1.8
|
)
|
|
54.2
|
|
|
53.6
|
|
|
1.1
|
|
||||
Total specialty
|
$
|
47.3
|
|
|
$
|
52.6
|
|
|
(10.1
|
)
|
|
$
|
167.9
|
|
|
$
|
180.5
|
|
|
(7.0
|
)
|
|
Statutory Loss and LAE Ratios
|
($ millions)
|
%
|
||||||||||||||||||||
Three months ended September 30
|
Earned Premium
|
|
Cat Loss & ALAE
|
|
Non-Cat Loss & ALAE
|
|
Statutory Loss & LAE
|
Cat loss Ratio
|
|
Non-Cat Loss & ALAE Ratio
|
|
Total Loss and LAE Ratio
|
||||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Specialty insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Excess & Surplus property
|
$
|
7.7
|
|
|
$
|
(1.4
|
)
|
|
$
|
1.1
|
|
|
$
|
(0.3
|
)
|
(18.0
|
)
|
|
14.4
|
|
(3.6
|
)
|
Excess & Surplus casualty
|
10.0
|
|
|
—
|
|
|
5.8
|
|
|
5.8
|
|
—
|
|
|
57.9
|
|
57.9
|
|
||||
Programs
|
22.3
|
|
|
0.1
|
|
|
18.8
|
|
|
18.9
|
|
0.6
|
|
|
84.6
|
|
85.2
|
|
||||
Workers’ compensation
|
16.7
|
|
|
—
|
|
|
10.7
|
|
|
10.7
|
|
—
|
|
|
63.7
|
|
63.7
|
|
||||
Total specialty
|
56.7
|
|
|
(1.3
|
)
|
|
36.4
|
|
|
35.1
|
|
(2.2
|
)
|
|
64.2
|
|
62.0
|
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
—
|
|
|
—
|
|
3.0
|
|
||||
Total Loss and LAE
|
$
|
56.7
|
|
|
$
|
(1.3
|
)
|
|
$
|
36.4
|
|
|
$
|
36.8
|
|
(2.2
|
)
|
|
64.2
|
|
65.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Specialty insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Excess & Surplus property
|
$
|
5.2
|
|
|
$
|
—
|
|
|
$
|
1.5
|
|
|
$
|
1.5
|
|
—
|
|
|
28.7
|
|
28.7
|
|
Excess & Surplus casualty
|
8.8
|
|
|
—
|
|
|
4.8
|
|
|
4.8
|
|
—
|
|
|
54.9
|
|
54.9
|
|
||||
Programs
|
29.4
|
|
|
0.6
|
|
|
43.4
|
|
|
44.0
|
|
1.9
|
|
|
147.7
|
|
149.6
|
|
||||
Workers’ compensation
|
17.2
|
|
|
—
|
|
|
15.6
|
|
|
15.6
|
|
—
|
|
|
90.5
|
|
90.5
|
|
||||
Total specialty
|
60.6
|
|
|
0.6
|
|
|
65.3
|
|
|
65.9
|
|
0.9
|
|
|
107.8
|
|
108.7
|
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
—
|
|
|
—
|
|
3.8
|
|
||||
Total Loss and LAE
|
$
|
60.6
|
|
|
$
|
0.6
|
|
|
$
|
65.3
|
|
|
$
|
68.2
|
|
0.9
|
|
|
107.8
|
|
112.5
|
|
|
Statutory Loss and LAE Ratios
|
($ millions)
|
%
|
||||||||||||||||||
Nine months ended September 30
|
Earned Premium
|
|
Cat Loss & ALAE
|
|
Non-Cat Loss & ALAE
|
|
Statutory Loss & LAE
|
Cat loss Ratio
|
|
Non-Cat Loss & ALAE Ratio
|
|
Total Loss and LAE Ratio
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Specialty insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Excess & Surplus property
|
$
|
22.9
|
|
|
$
|
1.1
|
|
|
$
|
3.8
|
|
|
$
|
4.9
|
|
5.2
|
|
16.1
|
|
21.3
|
Excess & Surplus casualty
|
28.7
|
|
|
—
|
|
|
15.1
|
|
|
15.1
|
|
—
|
|
52.5
|
|
52.5
|
||||
Programs
|
68.2
|
|
|
0.5
|
|
|
57.9
|
|
|
58.4
|
|
0.7
|
|
85.0
|
|
85.7
|
||||
Workers’ compensation
|
51.7
|
|
|
—
|
|
|
33.2
|
|
|
33.2
|
|
—
|
|
64.1
|
|
64.1
|
||||
Total specialty
|
171.5
|
|
|
1.6
|
|
|
110.0
|
|
|
111.6
|
|
1.0
|
|
64.1
|
|
65.1
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
—
|
|
—
|
|
2.4
|
||||
Total Loss and LAE
|
$
|
171.5
|
|
|
$
|
1.6
|
|
|
$
|
110.0
|
|
|
$
|
115.7
|
|
1.0
|
|
64.1
|
|
67.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Specialty insurance segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Excess & Surplus property
|
$
|
15.1
|
|
|
$
|
0.2
|
|
|
$
|
1.8
|
|
|
$
|
2.0
|
|
1.8
|
|
11.4
|
|
13.2
|
Excess & Surplus casualty
|
24.8
|
|
|
—
|
|
|
8.7
|
|
|
8.7
|
|
—
|
|
35.4
|
|
35.4
|
||||
Programs
|
93.7
|
|
|
0.7
|
|
|
102.3
|
|
|
103.0
|
|
0.7
|
|
109.2
|
|
109.9
|
||||
Workers’ compensation
|
48.9
|
|
|
—
|
|
|
39.0
|
|
|
39.0
|
|
—
|
|
79.6
|
|
79.6
|
||||
Total specialty
|
182.5
|
|
|
0.9
|
|
|
151.8
|
|
|
152.7
|
|
0.5
|
|
83.2
|
|
83.7
|
||||
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
6.2
|
|
—
|
|
—
|
|
3.4
|
||||
Total Loss and LAE
|
$
|
182.5
|
|
|
$
|
0.9
|
|
|
$
|
151.8
|
|
|
$
|
158.9
|
|
0.5
|
|
83.2
|
|
87.1
|
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Specialty Insurance
|
||||||||||
Three months ended September 30, 2013
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
47.3
|
|
|
$
|
0.8
|
|
|
$
|
46.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
56.7
|
|
|
4.5
|
|
|
52.2
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
(1.3
|
)
|
|
0.1
|
|
|
(1.4
|
)
|
|||
Non-cat loss and ALAE
|
36.4
|
|
|
6.3
|
|
|
30.1
|
|
|||
Total Loss and ALAE
|
35.1
|
|
|
6.4
|
|
|
28.7
|
|
|||
ULAE
|
1.7
|
|
|
0.2
|
|
|
1.5
|
|
|||
Total Loss and LAE incurred
|
36.8
|
|
|
6.6
|
|
|
30.2
|
|
|||
Underwriting expenses
|
16.8
|
|
|
0.8
|
|
|
16.0
|
|
|||
Net underwriting gain (loss)
|
$
|
3.1
|
|
|
$
|
(2.9
|
)
|
|
$
|
6.0
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
(2.2
|
)%
|
|
1.1
|
%
|
|
(2.5
|
)%
|
|||
Non-cat loss and ALAE ratio
|
64.2
|
%
|
|
142.9
|
%
|
|
57.4
|
%
|
|||
Total Loss and ALAE ratio
|
62.0
|
%
|
|
144.0
|
%
|
|
54.9
|
%
|
|||
ULAE ratio
|
3.0
|
%
|
|
4.9
|
%
|
|
2.9
|
%
|
|||
Total Loss and LAE ratio
|
65.0
|
%
|
|
148.9
|
%
|
|
57.8
|
%
|
|||
Expense ratio
|
35.6
|
%
|
|
100.7
|
%
|
|
34.5
|
%
|
|||
Combined ratio
|
100.6
|
%
|
|
249.6
|
%
|
|
92.3
|
%
|
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Specialty Insurance
|
||||||||||
Nine months ended September 30, 2013
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
167.9
|
|
|
$
|
0.9
|
|
|
$
|
167.0
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
171.5
|
|
|
22.4
|
|
|
149.1
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
1.6
|
|
|
0.5
|
|
|
1.1
|
|
|||
Non-cat loss and ALAE
|
110.0
|
|
|
26.4
|
|
|
83.6
|
|
|||
Total Loss and ALAE
|
111.6
|
|
|
26.9
|
|
|
84.7
|
|
|||
ULAE
|
4.1
|
|
|
1.2
|
|
|
2.9
|
|
|||
Total Loss and LAE incurred
|
115.7
|
|
|
28.1
|
|
|
87.6
|
|
|||
Underwriting expenses
|
60.4
|
|
|
2.2
|
|
|
58.2
|
|
|||
Net underwriting (loss) gain
|
$
|
(4.6
|
)
|
|
$
|
(7.9
|
)
|
|
$
|
3.3
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
1.0
|
%
|
|
2.0
|
%
|
|
0.8
|
%
|
|||
Non-cat loss and ALAE ratio
|
64.1
|
%
|
|
117.8
|
%
|
|
56.0
|
%
|
|||
Total Loss and ALAE ratio
|
65.1
|
%
|
|
119.8
|
%
|
|
56.8
|
%
|
|||
ULAE ratio
|
2.4
|
%
|
|
5.3
|
%
|
|
1.9
|
%
|
|||
Total Loss and LAE ratio
|
67.5
|
%
|
|
125.1
|
%
|
|
58.7
|
%
|
|||
Expense ratio
|
36.0
|
%
|
|
258.0
|
%
|
|
34.8
|
%
|
|||
Combined ratio
|
103.5
|
%
|
|
383.1
|
%
|
|
93.5
|
%
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Specialty Insurance
|
||||||||||
Three months ended September 30, 2012
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
52.6
|
|
|
$
|
14.0
|
|
|
$
|
38.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
60.6
|
|
|
22.5
|
|
|
38.1
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
0.6
|
|
|
0.5
|
|
|
0.1
|
|
|||
Non-cat loss and ALAE
|
65.3
|
|
|
38.7
|
|
|
26.6
|
|
|||
Total Loss and ALAE
|
65.9
|
|
|
39.2
|
|
|
26.7
|
|
|||
ULAE
|
2.3
|
|
|
1.0
|
|
|
1.3
|
|
|||
Total Loss and LAE incurred
|
68.2
|
|
|
40.2
|
|
|
28.0
|
|
|||
Underwriting expenses
|
17.5
|
|
|
4.9
|
|
|
12.6
|
|
|||
Net underwriting loss
|
$
|
(25.1
|
)
|
|
$
|
(22.6
|
)
|
|
$
|
(2.5
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
0.9
|
%
|
|
2.2
|
%
|
|
0.3
|
%
|
|||
Non-cat loss and ALAE ratio
|
107.8
|
%
|
|
172.0
|
%
|
|
69.8
|
%
|
|||
Total Loss and ALAE ratio
|
108.7
|
%
|
|
174.2
|
%
|
|
70.1
|
%
|
|||
ULAE ratio
|
3.8
|
%
|
|
4.4
|
%
|
|
3.4
|
%
|
|||
Total Loss and LAE ratio
|
112.5
|
%
|
|
178.6
|
%
|
|
73.5
|
%
|
|||
Expense ratio
|
33.3
|
%
|
|
35.1
|
%
|
|
32.6
|
%
|
|||
Combined ratio
|
145.8
|
%
|
|
213.7
|
%
|
|
106.1
|
%
|
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Specialty Insurance
|
||||||||||
Nine months ended September 30, 2012
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
180.5
|
|
|
$
|
56.9
|
|
|
$
|
123.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
182.5
|
|
|
77.6
|
|
|
104.9
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
0.9
|
|
|
0.5
|
|
|
0.4
|
|
|||
Non-cat loss and ALAE
|
151.8
|
|
|
88.0
|
|
|
63.8
|
|
|||
Total Loss and ALAE
|
152.7
|
|
|
88.5
|
|
|
64.2
|
|
|||
ULAE
|
6.2
|
|
|
3.4
|
|
|
2.8
|
|
|||
Total Loss and LAE incurred
|
158.9
|
|
|
91.9
|
|
|
67.0
|
|
|||
Underwriting expenses
|
61.0
|
|
|
21.4
|
|
|
39.6
|
|
|||
Net underwriting loss
|
$
|
(37.4
|
)
|
|
$
|
(35.7
|
)
|
|
$
|
(1.7
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
0.5
|
%
|
|
0.6
|
%
|
|
0.4
|
%
|
|||
Non-cat loss and ALAE ratio
|
83.2
|
%
|
|
113.4
|
%
|
|
60.8
|
%
|
|||
Total Loss and ALAE ratio
|
83.7
|
%
|
|
114.0
|
%
|
|
61.2
|
%
|
|||
ULAE ratio
|
3.4
|
%
|
|
4.4
|
%
|
|
2.7
|
%
|
|||
Total Loss and LAE ratio
|
87.1
|
%
|
|
118.4
|
%
|
|
63.9
|
%
|
|||
Expense ratio
|
33.8
|
%
|
|
37.6
|
%
|
|
32.0
|
%
|
|||
Combined ratio
|
120.9
|
%
|
|
156.0
|
%
|
|
95.9
|
%
|
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Programs Unit
|
||||||||||
Three months ended September 30, 2013
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
17.5
|
|
|
$
|
0.8
|
|
|
$
|
16.7
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
22.3
|
|
|
4.5
|
|
|
17.8
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Non-cat loss and ALAE
|
18.8
|
|
|
6.3
|
|
|
12.5
|
|
|||
Total Loss and ALAE incurred
|
$
|
18.9
|
|
|
$
|
6.4
|
|
|
$
|
12.5
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
0.6
|
%
|
|
1.1
|
%
|
|
0.4
|
%
|
|||
Non-cat loss and ALAE ratio
|
84.6
|
%
|
|
142.9
|
%
|
|
69.9
|
%
|
|||
Total Loss and ALAE ratio
|
85.2
|
%
|
|
144.0
|
%
|
|
70.3
|
%
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Programs Unit
|
||||||||||
Nine months ended September 30, 2013
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
56.5
|
|
|
$
|
0.9
|
|
|
$
|
55.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
68.2
|
|
|
22.4
|
|
|
45.8
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|||
Non-cat loss and ALAE
|
57.9
|
|
|
26.4
|
|
|
31.5
|
|
|||
Total Loss and ALAE incurred
|
$
|
58.4
|
|
|
$
|
26.9
|
|
|
$
|
31.5
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
0.7
|
%
|
|
2.0
|
%
|
|
0.1
|
%
|
|||
Non-cat loss and ALAE ratio
|
85.0
|
%
|
|
117.8
|
%
|
|
69.0
|
%
|
|||
Total Loss and ALAE ratio
|
85.7
|
%
|
|
119.8
|
%
|
|
69.1
|
%
|
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Programs Unit
|
||||||||||
Three months ended September 30, 2012
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
23.9
|
|
|
$
|
14.0
|
|
|
$
|
9.9
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
29.4
|
|
|
22.5
|
|
|
6.9
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
0.6
|
|
|
0.5
|
|
|
0.1
|
|
|||
Non-cat loss and ALAE
|
43.4
|
|
|
38.7
|
|
|
4.7
|
|
|||
Total Loss and ALAE incurred
|
$
|
44.0
|
|
|
$
|
39.2
|
|
|
$
|
4.8
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
1.9
|
%
|
|
2.2
|
%
|
|
1.1
|
%
|
|||
Non-cat loss and ALAE ratio
|
147.7
|
%
|
|
172.0
|
%
|
|
68.9
|
%
|
|||
Total Loss and ALAE ratio
|
149.6
|
%
|
|
174.2
|
%
|
|
70.0
|
%
|
($ millions)
|
SAP Former RED Unit’s Underwriting Results – Programs Unit
|
||||||||||
Nine months ended September 30, 2012
|
As Reported
|
|
RED
|
|
Pro-Forma without RED
|
||||||
Net written premiums
|
$
|
81.5
|
|
|
$
|
56.9
|
|
|
$
|
24.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
93.7
|
|
|
77.6
|
|
|
16.1
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
0.7
|
|
|
0.5
|
|
|
0.2
|
|
|||
Non-cat loss and ALAE
|
102.3
|
|
|
88.0
|
|
|
14.3
|
|
|||
Total Loss and ALAE incurred
|
$
|
103.0
|
|
|
$
|
88.5
|
|
|
$
|
14.5
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
0.7
|
%
|
|
0.6
|
%
|
|
0.9
|
%
|
|||
Non-cat loss and ALAE ratio
|
109.2
|
%
|
|
113.4
|
%
|
|
89.3
|
%
|
|||
Total Loss and ALAE ratio
|
109.9
|
%
|
|
114.0
|
%
|
|
90.2
|
%
|
|
($ millions)
|
September 30, 2013
|
|
December 31, 2012
|
|
$
Change
|
||||||
Personal insurance segment:
|
|
|
|
|
|
||||||
Personal auto
|
$
|
186.6
|
|
|
$
|
186.1
|
|
|
$
|
0.5
|
|
Homeowners
|
27.1
|
|
|
34.6
|
|
|
(7.5
|
)
|
|||
Other personal
|
10.9
|
|
|
10.3
|
|
|
0.6
|
|
|||
Total personal
|
224.6
|
|
|
231.0
|
|
|
(6.4
|
)
|
|||
Business insurance segment:
|
|
|
|
|
|
||||||
Commercial auto
|
84.2
|
|
|
77.4
|
|
|
6.8
|
|
|||
Commercial multi-peril
|
88.8
|
|
|
80.4
|
|
|
8.4
|
|
|||
Fire & allied lines
|
20.0
|
|
|
21.5
|
|
|
(1.5
|
)
|
|||
Other & product liability
|
160.5
|
|
|
159.6
|
|
|
0.9
|
|
|||
Other business
|
3.1
|
|
|
2.9
|
|
|
0.2
|
|
|||
Total business
|
356.6
|
|
|
341.8
|
|
|
14.8
|
|
|||
Specialty insurance segment:
|
|
|
|
|
|
||||||
Excess & Surplus property
|
8.1
|
|
|
5.1
|
|
|
3.0
|
|
|||
Excess & Surplus casualty
|
57.9
|
|
|
49.0
|
|
|
8.9
|
|
|||
Programs
|
143.8
|
|
|
152.7
|
|
|
(8.9
|
)
|
|||
Workers’ compensation
|
150.2
|
|
|
149.1
|
|
|
1.1
|
|
|||
Total specialty
|
360.0
|
|
|
355.9
|
|
|
4.1
|
|
|||
Total losses and loss expenses payable net of reinsurance recoverable on losses and loss expenses payable
|
$
|
941.2
|
|
|
$
|
928.7
|
|
|
$
|
12.5
|
|
|
($ millions)
|
September 30, 2013
|
|
% of Total
|
|
December 31, 2012
|
|
% of Total
|
||||
Cash and cash equivalents
|
$
|
54.3
|
|
|
2.4
|
|
$
|
59.0
|
|
|
2.5
|
Fixed maturities, at fair value:
|
|
|
|
|
|
|
|
||||
Fixed maturities
|
1,635.1
|
|
|
71.1
|
|
1,674.1
|
|
|
72.0
|
||
Treasury inflation-protected securities
|
209.7
|
|
|
9.1
|
|
231.0
|
|
|
9.9
|
||
Total fixed maturities
|
1,844.8
|
|
|
80.2
|
|
1,905.1
|
|
|
81.9
|
||
Notes receivable from affiliate
(1)
|
70.0
|
|
|
3.0
|
|
70.0
|
|
|
3.0
|
||
Equity securities, at fair value:
|
|
|
|
|
|
|
|
||||
Large-cap securities
|
184.6
|
|
|
8.0
|
|
174.2
|
|
|
7.5
|
||
Small-cap securities
|
66.5
|
|
|
2.9
|
|
54.2
|
|
|
2.3
|
||
Total equity securities
|
251.1
|
|
|
10.9
|
|
228.4
|
|
|
9.8
|
||
Other invested assets, at fair value:
|
|
|
|
|
|
|
|
||||
International funds
|
70.0
|
|
|
3.0
|
|
59.0
|
|
|
2.6
|
||
Other invested assets
|
6.3
|
|
|
0.3
|
|
5.4
|
|
|
0.2
|
||
Total other invested assets, at fair value
|
76.3
|
|
|
3.3
|
|
64.4
|
|
|
2.8
|
||
Other invested assets, at cost
|
5.0
|
|
|
0.2
|
|
0.5
|
|
|
—
|
||
Total portfolio
|
$
|
2,301.5
|
|
|
100.0
|
|
$
|
2,327.4
|
|
|
100.0
|
(1)
|
In May 2009, we entered into two separate Credit Agreements with State Auto Mutual. Under these Credit Agreements, State Auto Mutual borrowed a total of $70.0 million from us on an unsecured basis. Interest is payable semi-annually at a fixed annual interest rate of 7.00%. Principal is payable May 2019.
|
|
|
($ millions)
|
Amortized cost
|
|
Fair
value
|
||||
Due in 1 year or less
|
$
|
57.2
|
|
|
$
|
57.9
|
|
Due after 1 year through 5 years
|
367.1
|
|
|
385.8
|
|
||
Due after 5 years through 10 years
|
374.6
|
|
|
391.6
|
|
||
Due after 10 years
|
668.6
|
|
|
666.1
|
|
||
U.S. government agencies residential mortgage-backed securities
|
334.6
|
|
|
343.4
|
|
||
Total
|
$
|
1,802.1
|
|
|
$
|
1,844.8
|
|
($ millions)
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30
|
|
September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Gross investment income:
|
|
|
|
|
|
||||||||||
Fixed maturities
|
$
|
16.2
|
|
|
$
|
14.7
|
|
|
$
|
48.2
|
|
|
$
|
49.1
|
|
Equity securities
|
1.9
|
|
|
1.5
|
|
|
4.7
|
|
|
3.5
|
|
||||
Other
|
1.3
|
|
|
1.4
|
|
|
4.1
|
|
|
4.1
|
|
||||
Total gross investment income
|
19.4
|
|
|
17.6
|
|
|
57.0
|
|
|
56.7
|
|
||||
Less: Investment expenses
|
0.6
|
|
|
0.4
|
|
|
1.6
|
|
|
1.5
|
|
||||
Net investment income
|
$
|
18.8
|
|
|
$
|
17.2
|
|
|
$
|
55.4
|
|
|
$
|
55.2
|
|
|
|
|
|
|
|
|
|
||||||||
Average invested assets (at cost)
|
$
|
2,122.0
|
|
|
$
|
2,131.4
|
|
|
$
|
2,136.3
|
|
|
$
|
2,180.6
|
|
Annualized investment yield
|
3.5
|
%
|
|
3.2
|
%
|
|
3.5
|
%
|
|
3.4
|
%
|
||||
Annualized investment yield, after tax
|
2.8
|
%
|
|
2.5
|
%
|
|
2.7
|
%
|
|
2.6
|
%
|
||||
Net investment income, after tax
|
$
|
14.6
|
|
|
$
|
13.4
|
|
|
$
|
43.1
|
|
|
$
|
42.5
|
|
Effective tax rate
|
22.1
|
%
|
|
21.8
|
%
|
|
22.2
|
%
|
|
22.9
|
%
|
|
($ in millions)
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30, 2013
|
|
September 30, 2013
|
||||||||||||
|
Realized gains (losses)
|
|
Proceeds received on sale
|
|
Realized gains (losses)
|
|
Proceeds received on sale
|
||||||||
Realized gains:
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
$
|
0.4
|
|
|
$
|
14.4
|
|
|
$
|
1.6
|
|
|
$
|
72.6
|
|
Equity securities
|
7.9
|
|
|
28.6
|
|
|
17.9
|
|
|
69.0
|
|
||||
Other invested assets
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
||||
Total realized gains
|
8.4
|
|
|
43.1
|
|
|
19.6
|
|
|
141.7
|
|
||||
Realized losses:
|
|
|
|
|
|
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Sales
|
(0.3
|
)
|
|
2.5
|
|
|
(1.0
|
)
|
|
6.7
|
|
||||
OTTI
|
(0.3
|
)
|
|
—
|
|
|
(2.6
|
)
|
|
—
|
|
||||
Fixed maturities
|
|
|
|
|
|
|
|
||||||||
Sales
|
(0.3
|
)
|
|
5.2
|
|
|
(0.3
|
)
|
|
5.2
|
|
||||
Total realized losses
|
(0.9
|
)
|
|
7.7
|
|
|
(3.9
|
)
|
|
11.9
|
|
||||
Net realized gain on investments
|
$
|
7.5
|
|
|
$
|
50.8
|
|
|
$
|
15.7
|
|
|
$
|
153.6
|
|
($ millions, except # of positions)
|
Three months ended
|
|
Nine months ended
|
||||||||||
|
September 30
|
|
September 30
|
||||||||||
|
Number of positions
|
|
Total impairment
|
|
Number of positions
|
|
Total impairment
|
||||||
Equity securities:
|
|
|
|
||||||||||
Small-cap securities
|
3
|
|
|
$
|
(0.3
|
)
|
|
19
|
|
|
$
|
(1.3
|
)
|
Large-cap securities
|
—
|
|
|
—
|
|
|
1
|
|
|
(1.3
|
)
|
||
Total other-than-temporary impairments
|
3
|
|
|
$
|
(0.3
|
)
|
|
20
|
|
|
$
|
(2.6
|
)
|
|
($ millions, except # of positions)
|
Cost or amortized cost
|
|
Gross unrealized holding gains
|
|
Number of gain positions
|
|
Gross unrealized holding
losses
|
|
Number of loss positions
|
|
Fair value
|
||||||||||
Fixed maturities:
|
|
|
|
||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
348.9
|
|
|
$
|
18.4
|
|
|
41
|
|
|
$
|
(3.9
|
)
|
|
24
|
|
|
$
|
363.4
|
|
Obligations of states and political subdivisions
|
791.9
|
|
|
29.8
|
|
|
236
|
|
|
(16.7
|
)
|
|
81
|
|
|
805.0
|
|
||||
Corporate securities
|
326.7
|
|
|
11.6
|
|
|
67
|
|
|
(5.3
|
)
|
|
21
|
|
|
333.0
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
334.6
|
|
|
11.4
|
|
|
90
|
|
|
(2.6
|
)
|
|
27
|
|
|
343.4
|
|
||||
Total fixed maturities
|
1,802.1
|
|
|
71.2
|
|
|
434
|
|
|
(28.5
|
)
|
|
153
|
|
|
1,844.8
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Large-cap securities
|
150.5
|
|
|
36.2
|
|
|
35
|
|
|
(2.1
|
)
|
|
6
|
|
|
184.6
|
|
||||
Small-cap securities
|
45.1
|
|
|
21.4
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
66.5
|
|
||||
Total equity securities
|
195.6
|
|
|
57.6
|
|
|
106
|
|
|
(2.1
|
)
|
|
6
|
|
|
251.1
|
|
||||
Other invested assets
|
49.3
|
|
|
27.0
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
76.3
|
|
||||
Total available-for-sale investments
|
$
|
2,047.0
|
|
|
$
|
155.8
|
|
|
543
|
|
|
$
|
(30.6
|
)
|
|
159
|
|
|
$
|
2,172.2
|
|
($ millions)
|
September 30, 2013
|
|
December 31, 2012
|
|
$
Change
|
|||||
Available-for-sale investments:
|
|
|
|
|
|
|||||
Unrealized holding gains:
|
|
|
|
|
|
|||||
Fixed maturities
|
$
|
42.7
|
|
|
$
|
128.9
|
|
|
(86.2
|
)
|
Equity securities
|
55.5
|
|
|
32.2
|
|
|
23.3
|
|
||
Other invested assets
|
27.0
|
|
|
15.4
|
|
|
11.6
|
|
||
Unrealized gains
|
125.2
|
|
|
176.5
|
|
|
(51.3
|
)
|
||
Net deferred federal income tax liability (less valuation allowance)
|
(43.5
|
)
|
|
(52.5
|
)
|
|
9.0
|
|
||
Unrealized gains, net of tax
|
$
|
81.7
|
|
|
$
|
124.0
|
|
|
(42.3
|
)
|
|
($ millions)
|
Three months ended
|
|
Nine months ended
|
||||||||||||
|
September 30
|
|
September 30
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Income (loss) before federal income taxes
|
$
|
18.7
|
|
|
$
|
(5.6
|
)
|
|
$
|
45.0
|
|
|
$
|
(10.3
|
)
|
Current tax expense (benefit)
|
0.2
|
|
|
(0.1
|
)
|
|
0.6
|
|
|
(0.1
|
)
|
||||
Deferred tax expense (benefit)
|
3.6
|
|
|
(4.2
|
)
|
|
8.0
|
|
|
(9.9
|
)
|
||||
|
3.8
|
|
|
(4.3
|
)
|
|
8.6
|
|
|
(10.0
|
)
|
||||
Valuation allowance
|
(3.6
|
)
|
|
4.2
|
|
|
(8.0
|
)
|
|
9.9
|
|
||||
Total federal income tax expense (benefit)
|
0.2
|
|
|
(0.1
|
)
|
|
0.6
|
|
|
(0.1
|
)
|
||||
Net income (loss)
|
$
|
18.5
|
|
|
$
|
(5.5
|
)
|
|
$
|
44.4
|
|
|
$
|
(10.2
|
)
|
|
Three months ended
|
|
Nine months ended
|
||||
($ millions)
|
September 30
|
|
September 30
|
||||
Continuing operations
|
$
|
(3.6
|
)
|
|
$
|
(8.0
|
)
|
Other comprehensive income
|
(3.4
|
)
|
|
8.0
|
|
||
Change in valuation allowance
|
$
|
(7.0
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
1.
|
Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission;
|
2.
|
Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; and
|
3.
|
Our disclosure controls and procedures are effective in timely making known to them material information required to be included in our periodic filings with the Securities and Exchange Commission.
|
|
|
Exhibit
No.
|
|
Description of Exhibits
|
|
|
|
|
|
10.01
|
|
|
Corrected Amendment No. 2 to the 2009 Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
|
|
|
31.01
|
|
|
CEO certification required by Section 302 of Sarbanes Oxley Act of 2002
|
|
|
|
|
31.02
|
|
|
CFO certification required by Section 302 of Sarbanes Oxley Act of 2002
|
|
|
|
|
32.01
|
|
|
CEO certification required by Section 906 of Sarbanes Oxley Act of 2002
|
|
|
|
|
32.02
|
|
|
CFO certification required by Section 906 of Sarbanes Oxley Act of 2002
|
|
|
|
|
101.INS
|
|
|
XBRL Instance Document
|
|
|
|
|
101.SCH
|
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
101.CAL
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
101.DEF
|
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
|
|
|
101.LAB
|
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
101.PRE
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
|
|
|
State Auto Financial Corporation
|
|
|
Date: November 6, 2013
|
/s/ Steven E. English
|
|
Steven E. English
|
|
Chief Financial Officer
|
|
(Duly Authorized Officer and
|
|
Principal Financial Officer)
|
“(c)
|
In the event of a Change in Control or a Potential Change in Control, as defined herein, the accelerated vesting provided above shall occur only if the Participant incurs a termination of employment with the Company and any related entity within one (1) year of the Change in Control or Potential Change in Control; provided, however, that if the Change in Control or Potential Change in Control involves a change in the ownership of the Company and the successor entity does not provide benefits of equal or greater value at the time of the transaction, the Participant’s Award(s) shall automatically vest upon the close of the Change in Control or Potential Change in Control transaction. For purposes of the Plan, “termination of employment” means a separation from service as defined in Code Section 409A, as amended.”
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: November 6, 2013
|
/s/ Robert P. Restrepo, Jr.
|
|
Robert P. Restrepo, Jr., Chief Executive Officer
|
|
(Principal executive officer)
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
Date: November 6, 2013
|
/s/ Steven E. English
|
|
Steven E. English, Chief Financial Officer
|
|
(Principal financial officer)
|
|
/s/ Robert P. Restrepo, Jr.
|
|
Robert P. Restrepo, Jr.
|
|
Chief Executive Officer
|
|
November 6, 2013
|
|
/s/ Steven E. English
|
|
Steven E. English
|
|
Chief Financial Officer
|
|
November 6, 2013
|