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FORM 10-K
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ý
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Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Ohio
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31-1324304
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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518 East Broad Street, Columbus, Ohio
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43215-3976
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Form 10-K
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Item
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Description
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Page
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Part I
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1
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1A
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1B
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2
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3
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4
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Part II
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5
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6
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7
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7A
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8
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9
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9A
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9B
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Part III
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10
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11
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12
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13
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14
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Part IV
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15
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Glossary of Terms for State Auto Financial Corporation and Its Subsidiaries and Affiliates
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State Auto Financial or STFC
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Refers to our holding company, State Auto Financial Corporation.
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We, us, our or the Company
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Refers to STFC and its consolidated subsidiaries, namely State Auto Property & Casualty Insurance Company (“State Auto P&C”), Milbank Insurance Company (“Milbank”), State Auto Insurance Company of Ohio (“SA Ohio”), Stateco Financial Services, Inc. (“Stateco”). STFC’s former subsidiary Farmers Casualty Insurance Company (“Farmers”) was merged into State Auto P&C as of the close of business on December 31, 2012.
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State Auto Mutual
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Refers to State Automobile Mutual Insurance Company, which owns approximately 62.5% of STFC’s outstanding common shares. State Auto Mutual also owns Risk Evaluation & Design, LLC (“RED”), which previously acted as a managing general underwriter exclusively for the benefit of our Pooled Companies.
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STFC Pooled Companies
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Refers to State Auto P&C, Milbank, and SA Ohio.
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Mutual Pooled Companies
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Refers to State Auto Mutual, and certain subsidiaries and affiliates of State Auto Mutual, namely State Auto Florida Insurance Company (“SA Florida”), State Auto Insurance Company of Wisconsin (“SA Wisconsin”), Meridian Citizens Mutual Insurance Company (“Meridian Citizens Mutual”), Meridian Security Insurance Company (“Meridian Security”), Beacon National Insurance Company (“Beacon National”), Patrons Mutual Insurance Company of Connecticut (“Patrons Mutual”), Litchfield Mutual Fire Insurance Company (“Litchfield”), Rockhill Insurance Company (“RIC”), Plaza Insurance Company (“Plaza”), American Compensation Insurance Company (“American Compensation”) and Bloomington Compensation Insurance Company (“Bloomington Compensation”). At the close of business on December 31, 2012, SA Florida and Beacon National were merged into Meridian Security. At the close of business on March 31, 2013, Litchfield was merged into Patrons Mutual. At the close of business on July 2, 2014, Meridian Citizens Mutual was merged into State Auto Mutual.
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Pooled Companies or our Pooled Companies
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Refers to the STFC Pooled Companies and the Mutual Pooled Companies.
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Patrons Insurance Group or Patrons Group
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Refers to Patrons Mutual and Litchfield.
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Rockhill Insurance Group
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Refers to Rockhill Holding Company, its insurance subsidiaries, namely RIC, Plaza, American Compensation and Bloomington Compensation, and its other non-insurance subsidiaries, including RTW, Inc. (“RTW”), a holding company that owns 100% of American Compensation and Bloomington Compensation.
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Rockhill Insurers
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Refers to RIC, Plaza, American Compensation and Bloomington Compensation.
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State Auto Group
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Refers to the Pooled Companies and, through December 31, 2012, Beacon Lloyds Insurance Company, which was dissolved as of the close of business on December 31, 2012.
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Glossary of Selected Insurance and Accounting Terms
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Accident year
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The calendar year in which loss events occur, regardless of when the losses are actually reported, booked or paid.
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Accounting standards codification or ASC
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The Codification is the single source of authoritative nongovernmental GAAP developed by the Financial Accounting Standards Board (“FASB”).
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Admitted insurer
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An insurer licensed to transact insurance business within a state and subject to comprehensive policy rate, form and market conduct regulation by that state’s insurance regulatory authority.
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American Institute of Certified Public Accountants or AICPA
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The AICPA represents the certified public accounting profession nationally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA also monitors and enforces compliance with the profession's technical and ethical standards.
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Allocated loss adjustment expenses or ALAE
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The costs that can be related to a specific claim, which may include attorney fees, external claims adjusters and investigation costs, among others.
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Book value per share
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Total common stockholders’ equity divided by the number of common shares outstanding.
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Catastrophe loss
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Loss and ALAE from catastrophes, where catastrophes are defined as a severe loss caused by various natural events, including hurricanes, hailstorms, tornadoes, windstorms, earthquakes, severe winter weather and fires. Our catastrophe losses are those designated by the Insurance Services Office (“ISO”) Property Claim Services (“PCS”). PCS defines a catastrophe as an event that causes $25 million or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers.
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Combined ratio
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The sum of the loss and LAE ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.
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Debt to capital ratio
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The ratio of notes payable to the sum of total stockholders’ equity and notes payable.
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Deferred acquisition costs or DAC
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Expenses that vary with, and are primarily related to, the production of new and renewal insurance business, and are deferred and amortized to achieve a matching of revenues and expenses when reported in financial statements prepared in accordance with GAAP.
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Direct written premiums
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The amounts charged by an insurer to insureds in exchange for coverages provided in accordance with the terms of an insurance contract. The amounts exclude the impact of all reinsurance premiums, either assumed or ceded.
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Duration
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A measure of the sensitivity of a financial asset’s price to interest rate movements.
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Earned premiums or premiums earned
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The portion of written premiums that applies to the expired portion of the policy term. Earned premiums are recognized as revenue under both SAP and GAAP.
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Excess and surplus lines insurance
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Specialized property and liability coverages written by non-admitted insurers. These coverages include exposures that do not fit within normal underwriting patterns, involve a degree of risk that is not commensurate with standard rates and/or policy forms, or are not written by admitted insurers because of general market conditions.
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Expense ratio or underwriting expense ratio
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For SAP, it is the ratio of (i) the sum of statutory underwriting and miscellaneous expenses incurred offset by miscellaneous income (collectively, “underwriting expenses”) to (ii) written premiums. For GAAP, it is the ratio of acquisition and operating expenses incurred to earned premiums.
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Generally accepted accounting principles or GAAP
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Accounting practices used in the United States of America determined by the FASB and American Institute of Certified Public Accountants (“AICPA”).
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Incurred but not reported reserves or IBNR
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Estimated losses and LAE that have been incurred but not yet reported to the insurer. This includes amounts for unreported claims, development on known cases, and re-opened claims.
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Loss adjustment expenses or LAE
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The expenses of settling claims, including legal and other fees, and the portion of general expenses allocated to claim settlement. LAE is comprised of ALAE and ULAE.
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Loss and LAE ratio or loss ratio
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For both SAP and GAAP, it is the ratio of incurred losses and LAE to earned premiums.
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Loss reserves
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Liabilities established by insurers and reinsurers to reflect the estimated cost of claims incurred that the insurer or reinsurer will ultimately be required to pay in respect of insurance or reinsurance it has written. Reserves are established for losses and for LAE, and consist of case reserves and IBNR reserves.
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Managing general underwriter or MGU
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An independent insurance professional firm that acts as an intermediary between the insurer and retail agents, much like a wholesaler. MGUs frequently have binding authority to issue insurance policies on behalf of an insurer that fit into the underwriting guidelines provided by that insurer. MGUs typically are compensated by an override commission on the insurance coverages sold by their sub-agents.
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National Association of Insurance Commissioners or NAIC
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An organization of the insurance commissioners or directors of all 50 states, the District of Columbia and the five U.S. territories organized to promote consistency of regulatory practices and statutory accounting standards throughout the United States.
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Net premiums written to surplus ratio or leverage ratio
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A SAP calculation which measures statutory surplus available to absorb losses. This ratio is calculated by dividing the net statutory premiums written for a rolling twelve month period by the ending statutory surplus for the period. For example, a ratio of 1.5 means that for every dollar of surplus, the insurer wrote $1.50 in premiums.
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Net written premiums
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Direct written premiums plus assumed reinsurance premiums less ceded reinsurance premiums.
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Non-admitted insurer or surplus lines carrier
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An insurer that is not required to be licensed in a state but is allowed to do business in that state subject to certain regulatory oversight by that state’s insurance regulatory authority. Non-admitted insurers are not subject to most of the rate and form regulations imposed on admitted insurers because they write specialized property and liability coverages, also known as excess and surplus lines insurance, which allows them the flexibility to change coverages offered and rates charged without time constraints and financial costs associated with the filing process. As such, these insurers offer an opportunity for coverage for specialized exposures that otherwise might not be insurable.
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Retail agent or retail agency
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An independent insurance professional who represents, and acts as an intermediary for, admitted insurers, generally recommending, marketing and selling insurance products and services to insurance consumers.
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Return on average equity
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The percent derived by dividing net income by average total stockholders’ equity.
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Risk-based capital or RBC
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A measure adopted by the NAIC and state regulatory authorities for determining the minimum statutory capital and surplus requirements of insurers. Insurers having total adjusted capital less than that required by the RBC calculation will be subject to varying degrees of regulatory action depending on the level of capital inadequacy.
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Standard insurance
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Insurance which is typically written by admitted insurers. Our personal and business insurance segments are comprised of standard insurance.
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Statutory accounting practices or SAP
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The practices and procedures prescribed or permitted by state insurance regulatory authorities in the United States for recording transactions and preparing financial statements.
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Statutory surplus
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Under SAP, the amount remaining after all liabilities, including loss reserves, are subtracted from all admitted assets. Admitted assets are assets of an insurer prescribed or permitted by a state to be recognized on the balance sheet prepared in accordance with SAP.
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Unallocated loss adjustment expenses or ULAE
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The costs incurred in settling claims, such as in-house processing costs, which cannot be associated with a specific claim.
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Underwriting gain or loss
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Under SAP, earned premiums less loss and LAE and underwriting expenses.
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Unearned premiums
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The portion of written premiums that applies to the unexpired portion of the policy term. Unearned premiums are not recognized as revenues under both SAP and GAAP.
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Wholesale broker
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An independent insurance professional who offers specialized insurance products and serves as an intermediary between a retail agent and an insurer, while typically having no contact with the insured. A wholesale broker may represent both admitted and non-admitted insurers, and may offer both standard and excess and surplus lines insurance.
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State
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% of Total
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Ohio
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10.2
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%
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Texas
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9.2
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Kentucky
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6.1
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Florida
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5.3
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Indiana
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4.3
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Minnesota
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4.2
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Tennessee
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4.0
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Connecticut
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3.8
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Illinois
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3.5
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California
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3.4
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Pennsylvania
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3.4
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Maryland
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3.3
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Michigan
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3.2
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South Carolina
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3.0
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All others
(1)
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33.1
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Total
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100.0
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%
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(1)
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No other single state accounted for 3.0% or more of the total direct written premiums written in 2014.
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($ millions)
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December 31
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2004
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2005
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2006
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2007
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2008
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2009
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2010
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2011
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2012
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2013
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2014
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||||||||||||||||||||||
Reinsurance recoverable
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$
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350.5
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$
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399.8
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$
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371.7
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$
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382.8
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$
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428.6
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$
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473.8
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$
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517.2
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$
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530.3
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$
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507.1
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$
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521.9
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$
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488.9
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Amount netted against assumed from State Auto Mutual
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$
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324.6
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$
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382.4
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$
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358.2
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$
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371.6
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$
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407.4
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$
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453.0
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$
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498.4
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$
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504.8
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$
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493.6
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$
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512.8
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$
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479.3
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Net reinsurance recoverable
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$
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25.9
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$
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17.4
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$
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13.5
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$
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11.2
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$
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21.2
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$
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20.8
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$
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18.8
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$
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25.5
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$
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13.5
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$
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9.1
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$
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9.6
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•
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the timely availability of sufficient, reliable data;
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•
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our ability to conduct a complete and accurate analysis of available data;
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•
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our ability to timely recognize changes in trends and to project both the severity and frequency of losses with reasonable accuracy;
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•
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uncertainties which are generally inherent in estimates and assumptions;
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•
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our ability to project changes in certain operating expense levels with reasonable accuracy;
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•
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the development, selection and application of appropriate rating formulae or other pricing methodologies;
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•
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our use of predictive modeling or other underwriting tools to assist with correctly and consistently achieving the intended results in underwriting and pricing;
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•
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our ability to establish and consistently follow company underwriting guidelines;
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•
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our ability to innovate with new product and/or pricing strategies, and the success of those innovations on implementation;
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•
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our ability to secure regulatory approval of premium rates on an adequate and timely basis and effectively implement such rate changes;
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•
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our ability to accurately predict consumer behavior, such as policyholder retention;
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•
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unanticipated court decisions, legislation or regulatory action;
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•
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unanticipated changes or execution problems in our claim settlement practices, including our ability to recognize and respond to fraudulent or inflated claims;
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•
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changing driving patterns for auto exposures; changing weather patterns (including those which may be related to climate change) for property exposures;
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•
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technological innovations in automobiles, such as accident avoidance systems and advances leading to autonomous cars;
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•
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changes in the medical sector of the economy; including healthcare reform cost shifting and other factors;
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•
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unanticipated changes in auto repair costs, auto parts prices and used car prices;
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•
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impact of inflation and other factors, such as demand surge on cost of construction materials, labor and other expenditures;
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•
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our ability to monitor and manage property concentration in catastrophe prone areas, such as hurricane, earthquake and wind/hail regions; and
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•
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the general state of the economy in the states in which we operate.
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2014
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High
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Low
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Dividend
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||||||
First Quarter
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$
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22.85
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$
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18.35
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$
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0.10
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Second Quarter
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23.62
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20.01
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0.10
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Third Quarter
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25.43
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20.30
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0.10
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Fourth Quarter
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24.00
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19.36
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0.10
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2013
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High
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Low
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Dividend
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||||||
First Quarter
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$
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17.99
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$
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14.10
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$
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0.10
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Second Quarter
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19.77
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15.48
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0.10
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Third Quarter
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23.10
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17.56
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0.10
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Fourth Quarter
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22.61
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18.65
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0.10
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(1)
Adjusted for stock splits.
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12/31/2009
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12/31/2010
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12/31/2011
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12/31/2012
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12/31/2013
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12/31/2014
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||||||
STFC
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100.00
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97.67
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79.44
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90.68
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131.73
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140.38
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NASDAQ Index
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100.00
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118.15
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117.22
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137.90
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193.29
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221.96
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NASDAQ Ins. Index
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100.00
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118.13
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124.81
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145.69
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191.08
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211.24
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($ millions, except per share data)
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2014
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2013
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|
2012
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|||||||
GAAP Basis:
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|||||||
Total revenues
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$
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1,172.7
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$
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1,153.0
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$
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1,150.1
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Net income
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$
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107.4
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$
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60.8
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$
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10.7
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Stockholders’ equity
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$
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872.9
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$
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785.0
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$
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737.2
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Book value per share
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$
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21.32
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$
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19.27
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$
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18.22
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Return on average equity
|
13.0
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%
|
|
8.0
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%
|
|
1.5
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%
|
||||
Debt to capital ratio
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10.4
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%
|
|
11.4
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%
|
|
13.6
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%
|
||||
Cat loss and ALAE ratio
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3.0
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%
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3.4
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%
|
|
6.4
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%
|
||||
Non-cat loss and LAE ratio
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68.8
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%
|
|
64.8
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%
|
|
68.3
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%
|
||||
Loss and LAE ratio
|
71.8
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%
|
|
68.2
|
%
|
|
74.7
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%
|
||||
Expense ratio
|
33.7
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%
|
|
33.6
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%
|
|
33.2
|
%
|
||||
Combined ratio
|
105.5
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%
|
|
101.8
|
%
|
|
107.9
|
%
|
||||
Premiums written growth
|
12.4
|
%
|
|
0.6
|
%
|
|
(17.8
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)%
|
||||
Investment yield
|
3.5
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
||||
|
|
|
|
|
|
|||||||
SAP Basis:
|
|
|
|
|
|
|||||||
Cat loss and ALAE points
|
3.0
|
%
|
|
3.4
|
%
|
|
6.4
|
%
|
||||
Non-cat loss and ALAE
|
62.1
|
%
|
|
58.6
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%
|
|
61.7
|
%
|
||||
ULAE
|
6.5
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%
|
|
6.5
|
%
|
|
6.7
|
%
|
||||
Loss and LAE ratio
|
71.6
|
%
|
|
68.5
|
%
|
|
74.8
|
%
|
||||
Expense ratio
|
34.4
|
%
|
|
34.5
|
%
|
|
33.6
|
%
|
||||
Combined ratio
|
106.0
|
%
|
|
103.0
|
%
|
|
108.4
|
%
|
||||
Net premiums written to surplus
|
1.5
|
|
|
1.4
|
|
|
1.7
|
|
•
|
Earned premiums in
2014
were
$1,074.1 million
compared to
$1,055.0 million
and
$1,042.1 million
in
2013
and
2012
, respectively. Earned premium growth in 2014 was driven by higher average new business premium, increased renewal pricing, and the addition of new distribution relationships.
|
•
|
The
2014
catastrophe loss ratio was
3.0%
compared to
3.4%
and
6.4%
for
2013
and
2012
, respectively. The improvement was primarily the result of fewer and less severe catastrophe events during 2014.
|
•
|
The SAP non-catastrophe loss and ALAE ratio for
2014
was
62.1%
compared to
58.6%
and
61.7%
for
2013
and
2012
, respectively. The ratios were impacted by strengthening RED reserves within the specialty insurance segment by $96.7 million, which included the net cost of the ADC reinsurance agreement, in 2014, $21.3 million in 2013 and $30.5 million in 2012. In addition, the HO QS Arrangement increased our SAP non-catastrophe loss and ALAE ratio 3.4 points in 2014, 2.8 points in 2013 and 2.3 points in 2012.
|
•
|
Our
2014
net income was favorably impacted by the recognition of $19.0 million of profit commission from the HO QS Arrangement. The HO QS Arrangement reduced our GAAP expense ratio by 0.9 points in 2014 and increased our GAAP expense ratios by 0.6 points in 2013 and 2012, respectively.
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
December 31, 2014
|
As Reported
|
|
HO QS Cession
|
|
Pro Forma
without HO QS
Cession
|
||||||
Net written premiums
|
$
|
1,194.2
|
|
|
$
|
83.3
|
|
|
$
|
1,277.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
1,074.1
|
|
|
175.6
|
|
|
1,249.7
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
32.3
|
|
|
19.0
|
|
|
51.3
|
|
|||
Non-cat loss and LAE
|
739.0
|
|
|
66.8
|
|
|
805.8
|
|
|||
Total Loss and LAE incurred
|
771.3
|
|
|
85.8
|
|
|
857.1
|
|
|||
Acquisition and operating expenses
|
361.9
|
|
|
70.0
|
|
|
431.9
|
|
|||
Net underwriting (loss) income
|
$
|
(59.1
|
)
|
|
$
|
19.8
|
|
|
$
|
(39.3
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
3.0
|
%
|
|
10.8
|
%
|
|
4.1
|
%
|
|||
Non-cat loss and LAE ratio
|
68.8
|
%
|
|
38.1
|
%
|
|
64.5
|
%
|
|||
Total Loss and LAE ratio
|
71.8
|
%
|
|
48.9
|
%
|
|
68.6
|
%
|
|||
Expense ratio
|
33.7
|
%
|
|
39.8
|
%
|
|
34.6
|
%
|
|||
Combined ratio
|
105.5
|
%
|
|
88.7
|
%
|
|
103.2
|
%
|
|||
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
December 31, 2013
|
As Reported
|
|
HO QS Cession
|
|
Pro Forma
without HO QS
Cession
|
||||||
Net written premiums
|
$
|
1,062.1
|
|
|
$
|
176.9
|
|
|
$
|
1,239.0
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
1,055.0
|
|
|
177.0
|
|
|
1,232.0
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
36.3
|
|
|
22.7
|
|
|
59.0
|
|
|||
Non-cat loss and LAE
|
683.5
|
|
|
70.0
|
|
|
753.5
|
|
|||
Total Loss and LAE incurred
|
719.8
|
|
|
92.7
|
|
|
812.5
|
|
|||
Acquisition and operating expenses
|
354.8
|
|
|
51.4
|
|
|
406.2
|
|
|||
Net underwriting (loss) income
|
$
|
(19.6
|
)
|
|
$
|
32.9
|
|
|
$
|
13.3
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
3.4
|
%
|
|
12.9
|
%
|
|
4.8
|
%
|
|||
Non-cat loss and LAE ratio
|
64.8
|
%
|
|
39.5
|
%
|
|
61.2
|
%
|
|||
Total Loss and LAE ratio
|
68.2
|
%
|
|
52.4
|
%
|
|
66.0
|
%
|
|||
Expense ratio
|
33.6
|
%
|
|
29.0
|
%
|
|
33.0
|
%
|
|||
Combined ratio
|
101.8
|
%
|
|
81.4
|
%
|
|
99.0
|
%
|
|||
|
($ millions)
|
GAAP HO QS Arrangement Cession - Overall Results
|
||||||||||
December 31, 2012
|
As Reported
|
|
HO QS Cession
|
|
Pro Forma
without HO QS
Cession
|
||||||
Net written premiums
|
$
|
1,055.3
|
|
|
$
|
172.3
|
|
|
$
|
1,227.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
1,042.1
|
|
|
166.2
|
|
|
1,208.3
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
67.1
|
|
|
49.5
|
|
|
116.6
|
|
|||
Non-cat loss and LAE
|
711.2
|
|
|
74.5
|
|
|
785.7
|
|
|||
Total Loss and LAE incurred
|
778.3
|
|
|
124.0
|
|
|
902.3
|
|
|||
Acquisition and operating expenses
|
345.9
|
|
|
48.2
|
|
|
394.1
|
|
|||
Net underwriting loss
|
$
|
(82.1
|
)
|
|
$
|
(6.0
|
)
|
|
$
|
(88.1
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
6.4
|
%
|
|
29.8
|
%
|
|
9.6
|
%
|
|||
Non-cat loss and LAE ratio
|
68.3
|
%
|
|
44.8
|
%
|
|
65.0
|
%
|
|||
Total Loss and LAE ratio
|
74.7
|
%
|
|
74.6
|
%
|
|
74.6
|
%
|
|||
Expense ratio
|
33.2
|
%
|
|
29.0
|
%
|
|
32.6
|
%
|
|||
Combined ratio
|
107.9
|
%
|
|
103.6
|
%
|
|
107.2
|
%
|
|||
|
($ millions)
|
SAP HO QS Arrangement Cession—Overall Results
|
||||||||||
December 31, 2014
|
As Reported
|
|
HO QS Cession
|
|
Pro Forma
without HO QS
Cession
|
||||||
Net written premiums
|
$
|
1,194.2
|
|
|
$
|
83.3
|
|
|
$
|
1,277.5
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
1,074.1
|
|
|
175.6
|
|
|
1,249.7
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
32.3
|
|
|
19.0
|
|
|
51.3
|
|
|||
Non-cat loss and ALAE
|
666.9
|
|
|
66.8
|
|
|
733.7
|
|
|||
Total Loss and ALAE
|
699.2
|
|
|
85.8
|
|
|
785.0
|
|
|||
ULAE
|
69.4
|
|
|
—
|
|
|
69.4
|
|
|||
Total Loss and LAE incurred
|
768.6
|
|
|
85.8
|
|
|
854.4
|
|
|||
Underwriting expenses
|
411.3
|
|
|
43.2
|
|
|
454.5
|
|
|||
Net underwriting (loss) income
|
$
|
(105.8
|
)
|
|
$
|
46.6
|
|
|
$
|
(59.2
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
3.0
|
%
|
|
10.8
|
%
|
|
4.1
|
%
|
|||
Non-cat loss and ALAE ratio
|
62.1
|
%
|
|
38.1
|
%
|
|
58.7
|
%
|
|||
Total loss and ALAE ratio
|
65.1
|
%
|
|
48.9
|
%
|
|
62.8
|
%
|
|||
ULAE ratio
|
6.5
|
%
|
|
—
|
%
|
|
5.6
|
%
|
|||
Total loss and LAE ratio
|
71.6
|
%
|
|
48.9
|
%
|
|
68.4
|
%
|
|||
Expense ratio
|
34.4
|
%
|
|
51.9
|
%
|
|
35.6
|
%
|
|||
Combined ratio
|
106.0
|
%
|
|
100.8
|
%
|
|
104.0
|
%
|
|||
|
|
|
|
|
|
($ millions)
|
SAP HO QS Arrangement Cession—Overall Results
|
||||||||||
December 31, 2013
|
As Reported
|
|
HO QS Cession
|
|
Pro Forma
without HO QS
Cession
|
||||||
Net written premiums
|
$
|
1,062.1
|
|
|
$
|
176.9
|
|
|
$
|
1,239.0
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
1,055.0
|
|
|
177.0
|
|
|
1,232.0
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
36.3
|
|
|
22.7
|
|
|
59.0
|
|
|||
Non-cat loss and ALAE
|
617.7
|
|
|
70.0
|
|
|
687.7
|
|
|||
Total Loss and ALAE
|
654.0
|
|
|
92.7
|
|
|
746.7
|
|
|||
ULAE
|
68.7
|
|
|
—
|
|
|
68.7
|
|
|||
Total Loss and LAE incurred
|
722.7
|
|
|
92.7
|
|
|
815.4
|
|
|||
Underwriting expenses
|
366.3
|
|
|
51.3
|
|
|
417.6
|
|
|||
Net underwriting (loss) income
|
$
|
(34.0
|
)
|
|
$
|
33.0
|
|
|
$
|
(1.0
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
3.4
|
%
|
|
12.9
|
%
|
|
4.8
|
%
|
|||
Non-cat loss and ALAE ratio
|
58.6
|
%
|
|
39.5
|
%
|
|
55.8
|
%
|
|||
Total loss and ALAE ratio
|
62.0
|
%
|
|
52.4
|
%
|
|
60.6
|
%
|
|||
ULAE ratio
|
6.5
|
%
|
|
—
|
%
|
|
5.6
|
%
|
|||
Total loss and LAE ratio
|
68.5
|
%
|
|
52.4
|
%
|
|
66.2
|
%
|
|||
Expense ratio
|
34.5
|
%
|
|
29.0
|
%
|
|
33.7
|
%
|
|||
Combined ratio
|
103.0
|
%
|
|
81.4
|
%
|
|
99.9
|
%
|
|||
|
|
|
|
|
|
($ millions)
|
SAP HO QS Arrangement Cession—Overall Results
|
||||||||||
December 31, 2012
|
As Reported
|
|
HO QS Cession
|
|
Pro Forma
without HO QS
Cession
|
||||||
Net written premiums
|
$
|
1,055.3
|
|
|
$
|
172.3
|
|
|
$
|
1,227.6
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
1,042.1
|
|
|
166.2
|
|
|
1,208.3
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
67.1
|
|
|
49.5
|
|
|
116.6
|
|
|||
Non-cat loss and ALAE
|
643.0
|
|
|
74.5
|
|
|
717.5
|
|
|||
Total Loss and ALAE
|
710.1
|
|
|
124.0
|
|
|
834.1
|
|
|||
ULAE
|
68.9
|
|
|
—
|
|
|
68.9
|
|
|||
Total Loss and LAE incurred
|
779.0
|
|
|
124.0
|
|
|
903.0
|
|
|||
Underwriting expenses
|
355.1
|
|
|
50.0
|
|
|
405.1
|
|
|||
Net underwriting loss
|
$
|
(92.0
|
)
|
|
$
|
(7.8
|
)
|
|
$
|
(99.8
|
)
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
6.4
|
%
|
|
29.8
|
%
|
|
9.6
|
%
|
|||
Non-cat loss and ALAE ratio
|
61.7
|
%
|
|
44.8
|
%
|
|
59.4
|
%
|
|||
Total loss and ALAE ratio
|
68.1
|
%
|
|
74.6
|
%
|
|
69.0
|
%
|
|||
ULAE ratio
|
6.7
|
%
|
|
—
|
%
|
|
5.7
|
%
|
|||
Total loss and LAE ratio
|
74.8
|
%
|
|
74.6
|
%
|
|
74.7
|
%
|
|||
Expense ratio
|
33.6
|
%
|
|
29.0
|
%
|
|
33.0
|
%
|
|||
Combined ratio
|
108.4
|
%
|
|
103.6
|
%
|
|
107.7
|
%
|
|||
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Net Written Premiums
|
|
|
|
|
|
||||||
Personal auto
|
$
|
354.4
|
|
|
$
|
377.2
|
|
|
$
|
383.6
|
|
Homeowners
(1)
|
146.4
|
|
|
58.8
|
|
|
56.5
|
|
|||
Other personal
|
31.3
|
|
|
29.4
|
|
|
29.4
|
|
|||
Total personal
|
$
|
532.1
|
|
|
$
|
465.4
|
|
|
$
|
469.5
|
|
|
|
|
|
|
|
||||||
(1)
December 31, 2014 net written premiums include $89.5 million of unearned premiums received by the STFC Pooled Companies on December 31, 2014 related to the expiration of the HO QS Arrangement.
|
($ millions)
Statutory Loss and LAE Ratios
|
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
|
||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal auto
|
$
|
362.6
|
|
|
$
|
7.0
|
|
|
$
|
228.6
|
|
|
$
|
235.6
|
|
|
1.9
|
|
63.1
|
|
65.0
|
Homeowners
|
58.8
|
|
|
5.5
|
|
|
21.3
|
|
|
26.8
|
|
|
9.4
|
|
36.1
|
|
45.5
|
||||
Other personal
|
30.0
|
|
|
1.4
|
|
|
11.0
|
|
|
12.4
|
|
|
4.5
|
|
36.9
|
|
41.4
|
||||
Total personal
|
$
|
451.4
|
|
|
$
|
13.9
|
|
|
$
|
260.9
|
|
|
$
|
274.8
|
|
|
3.1
|
|
57.8
|
|
60.9
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
43.5
|
|
|
—
|
|
—
|
|
9.6
|
||||
Total Loss and LAE
|
$
|
451.4
|
|
|
$
|
13.9
|
|
|
$
|
260.9
|
|
|
$
|
318.3
|
|
|
3.1
|
|
57.8
|
|
70.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal auto
|
$
|
378.4
|
|
|
$
|
4.6
|
|
|
$
|
253.0
|
|
|
$
|
257.6
|
|
|
1.2
|
|
66.9
|
|
68.1
|
Homeowners
|
56.1
|
|
|
6.8
|
|
|
20.9
|
|
|
27.7
|
|
|
12.2
|
|
37.4
|
|
49.6
|
||||
Other personal
|
29.5
|
|
|
2.6
|
|
|
11.9
|
|
|
14.5
|
|
|
8.6
|
|
40.5
|
|
49.1
|
||||
Total personal
|
$
|
464.0
|
|
|
$
|
14.0
|
|
|
$
|
285.8
|
|
|
$
|
299.8
|
|
|
3.0
|
|
61.6
|
|
64.6
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
42.4
|
|
|
—
|
|
—
|
|
9.1
|
||||
Total Loss and LAE
|
$
|
464.0
|
|
|
$
|
14.0
|
|
|
$
|
285.8
|
|
|
$
|
342.2
|
|
|
3.0
|
|
61.6
|
|
73.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Personal auto
|
$
|
382.0
|
|
|
$
|
10.7
|
|
|
$
|
242.5
|
|
|
$
|
253.2
|
|
|
2.8
|
|
63.4
|
|
66.2
|
Homeowners
|
59.7
|
|
|
8.5
|
|
|
23.2
|
|
|
31.7
|
|
|
14.3
|
|
38.9
|
|
53.2
|
||||
Other personal
|
28.1
|
|
|
7.7
|
|
|
11.0
|
|
|
18.7
|
|
|
27.4
|
|
39.3
|
|
66.7
|
||||
Total personal
|
$
|
469.8
|
|
|
$
|
26.9
|
|
|
$
|
276.7
|
|
|
$
|
303.6
|
|
|
5.7
|
|
58.9
|
|
64.6
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
41.2
|
|
|
—
|
|
—
|
|
8.8
|
||||
Total Loss and LAE
|
$
|
469.8
|
|
|
$
|
26.9
|
|
|
$
|
276.7
|
|
|
$
|
344.8
|
|
|
5.7
|
|
58.9
|
|
73.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For the years ended December 31, 2014 and 2013, respectively, the following table sets forth the reconciliation of as reported net written premiums to pro forma net written premiums that exclude the impact of the return of unearned premium associated with the termination of the HO QS Arrangement:
|
($ millions)
|
|
2014
|
|
2013
|
|
%
Change |
|
|||||
Net written premiums:
|
|
|
|
|
|
|
|
|||||
Personal insurance segment
|
|
$
|
532.1
|
|
|
$
|
465.4
|
|
|
14.3
|
|
|
Homeowners cession
|
|
172.8
|
|
|
176.9
|
|
|
(2.3
|
)
|
|
||
Return of ceded premium
|
|
(89.5
|
)
|
|
—
|
|
|
—
|
|
|
||
Pro forma net written premiums
|
|
$
|
615.4
|
|
|
$
|
642.3
|
|
|
(4.2
|
)
|
|
|
|
|
|
|
|
|
|
•
|
CustomFit
SM
homeowners
: Since 2011, we have rolled out CustomFit, our by-peril rating approach, in all states except North Carolina (which has regulatory restrictions).
|
•
|
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 deployed a model that allows us to identify homeowner risks that have a high probability of having insurance to value gaps. This model allows us to optimize our insurance to value reports, which has led to additional cost savings.
|
•
|
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
|
||||||||||
December 31, 2014
|
As
Reported
|
|
HO QS
Cession
|
|
Pro-Forma
without
HO QS
Cession
|
||||||
Net written premiums
|
$
|
146.4
|
|
|
$
|
83.3
|
|
|
$
|
229.7
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
58.8
|
|
|
175.6
|
|
|
234.4
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
5.5
|
|
|
19.0
|
|
|
24.5
|
|
|||
Non-cat loss and ALAE
|
21.3
|
|
|
66.8
|
|
|
88.1
|
|
|||
Total Loss and ALAE incurred
|
$
|
26.8
|
|
|
$
|
85.8
|
|
|
$
|
112.6
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
9.4
|
%
|
|
10.8
|
%
|
|
10.5
|
%
|
|||
Non-cat loss and ALAE ratio
|
36.1
|
%
|
|
38.1
|
%
|
|
37.6
|
%
|
|||
Total Loss and ALAE ratio
|
45.5
|
%
|
|
48.9
|
%
|
|
48.1
|
%
|
|||
|
|
|
|
|
|
($ millions)
|
SAP HO QS Arrangement Cession
– Homeowners
|
||||||||||
December 31, 2013
|
As
Reported
|
|
HO QS
Cession
|
|
Pro-Forma
without
HO QS
Cession
|
||||||
Net written premiums
|
$
|
58.8
|
|
|
$
|
176.9
|
|
|
$
|
235.7
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
56.1
|
|
|
177.0
|
|
|
233.1
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
6.8
|
|
|
22.7
|
|
|
29.5
|
|
|||
Non-cat loss and ALAE
|
20.9
|
|
|
70.0
|
|
|
90.9
|
|
|||
Total Loss and ALAE incurred
|
$
|
27.7
|
|
|
$
|
92.7
|
|
|
$
|
120.4
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
12.2
|
%
|
|
12.9
|
%
|
|
12.7
|
%
|
|||
Non-cat loss and ALAE ratio
|
37.4
|
%
|
|
39.5
|
%
|
|
39.0
|
%
|
|||
Total Loss and ALAE ratio
|
49.6
|
%
|
|
52.4
|
%
|
|
51.7
|
%
|
|||
|
|
|
|
|
|
($ millions)
|
SAP HO QS Arrangement Cession
– Homeowners
|
||||||||||
December 31, 2012
|
As
Reported
|
|
HO QS
Cession
|
|
Pro-Forma
without
HO QS
Cession
|
||||||
Net written premiums
|
$
|
56.5
|
|
|
$
|
172.3
|
|
|
$
|
228.8
|
|
|
|
|
|
|
|
||||||
Earned premiums
|
59.7
|
|
|
166.2
|
|
|
225.9
|
|
|||
Losses and LAE incurred:
|
|
|
|
|
|
||||||
Cat loss and ALAE
|
8.5
|
|
|
49.5
|
|
|
58.0
|
|
|||
Non-cat loss and ALAE
|
23.2
|
|
|
74.5
|
|
|
97.7
|
|
|||
Total Loss and ALAE incurred
|
$
|
31.7
|
|
|
$
|
124.0
|
|
|
$
|
155.7
|
|
|
|
|
|
|
|
||||||
Cat loss and ALAE ratio
|
14.3
|
%
|
|
29.8
|
%
|
|
25.7
|
%
|
|||
Non-cat loss and ALAE ratio
|
38.9
|
%
|
|
44.8
|
%
|
|
43.2
|
%
|
|||
Total Loss and ALAE ratio
|
53.2
|
%
|
|
74.6
|
%
|
|
68.9
|
%
|
|||
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Net Written Premiums
|
|
|
|
|
|
||||||
Commercial auto
|
$
|
101.8
|
|
|
$
|
96.2
|
|
|
$
|
88.4
|
|
Commercial multi-peril
|
121.4
|
|
|
113.5
|
|
|
101.1
|
|
|||
Fire & allied lines
|
76.9
|
|
|
77.8
|
|
|
75.6
|
|
|||
Other & product liability
|
71.4
|
|
|
69.5
|
|
|
66.5
|
|
|||
Other commercial
|
17.7
|
|
|
17.8
|
|
|
17.8
|
|
|||
Total business
|
$
|
389.2
|
|
|
$
|
374.8
|
|
|
$
|
349.4
|
|
|
|
|
|
|
|
($ millions)
Statutory Loss and LAE Ratios
|
Earned
Premium
|
|
Cat Loss
& ALAE
|
|
Non-Cat
Loss &
ALAE
|
|
Statutory
Loss &
LAE
|
|
Cat
loss
Ratio
|
|
Non-Cat
loss
Ratio
|
|
Total Loss
and LAE
Ratio
|
|||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial auto
|
$
|
98.5
|
|
|
$
|
0.8
|
|
|
$
|
56.6
|
|
|
$
|
57.4
|
|
|
0.8
|
|
|
57.5
|
|
|
58.3
|
|
Commercial multi-peril
|
118.0
|
|
|
7.0
|
|
|
68.1
|
|
|
75.1
|
|
|
6.0
|
|
|
57.6
|
|
|
63.6
|
|
||||
Fire & allied lines
|
77.4
|
|
|
8.7
|
|
|
34.1
|
|
|
42.8
|
|
|
11.3
|
|
|
44.0
|
|
|
55.3
|
|
||||
Other & product liability
|
70.2
|
|
|
—
|
|
|
32.6
|
|
|
32.6
|
|
|
—
|
|
|
46.5
|
|
|
46.5
|
|
||||
Other commercial
|
17.7
|
|
|
—
|
|
|
5.3
|
|
|
5.3
|
|
|
(0.3
|
)
|
|
30.3
|
|
|
30.0
|
|
||||
Total business
|
$
|
381.8
|
|
|
$
|
16.5
|
|
|
$
|
196.7
|
|
|
$
|
213.2
|
|
|
4.3
|
|
|
51.5
|
|
|
55.8
|
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
18.1
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
||||
Total Loss and LAE
|
$
|
381.8
|
|
|
$
|
16.5
|
|
|
$
|
196.7
|
|
|
$
|
231.3
|
|
|
4.3
|
|
|
51.5
|
|
|
60.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial auto
|
$
|
93.0
|
|
|
$
|
0.8
|
|
|
$
|
53.2
|
|
|
$
|
54.0
|
|
|
0.9
|
|
|
57.1
|
|
|
58.0
|
|
Commercial multi-peril
|
108.1
|
|
|
11.2
|
|
|
57.1
|
|
|
68.3
|
|
|
10.3
|
|
|
52.9
|
|
|
63.2
|
|
||||
Fire & allied lines
|
77.0
|
|
|
8.6
|
|
|
28.6
|
|
|
37.2
|
|
|
11.1
|
|
|
37.3
|
|
|
48.4
|
|
||||
Other & product liability
|
68.0
|
|
|
—
|
|
|
35.6
|
|
|
35.6
|
|
|
—
|
|
|
52.3
|
|
|
52.3
|
|
||||
Other commercial
|
18.1
|
|
|
0.3
|
|
|
7.4
|
|
|
7.7
|
|
|
2.0
|
|
|
40.4
|
|
|
42.4
|
|
||||
Total business
|
$
|
364.2
|
|
|
$
|
20.9
|
|
|
$
|
181.9
|
|
|
$
|
202.8
|
|
|
5.7
|
|
|
50.0
|
|
|
55.7
|
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
19.0
|
|
|
—
|
|
|
—
|
|
|
5.2
|
|
||||
Total Loss and LAE
|
$
|
364.2
|
|
|
$
|
20.9
|
|
|
$
|
181.9
|
|
|
$
|
221.8
|
|
|
5.7
|
|
|
50.0
|
|
|
60.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial auto
|
$
|
81.4
|
|
|
$
|
0.7
|
|
|
$
|
51.6
|
|
|
$
|
52.3
|
|
|
0.9
|
|
|
63.3
|
|
|
64.2
|
|
Commercial multi-peril
|
94.3
|
|
|
13.0
|
|
|
52.8
|
|
|
65.8
|
|
|
13.8
|
|
|
55.9
|
|
|
69.7
|
|
||||
Fire & allied lines
|
74.5
|
|
|
23.8
|
|
|
22.9
|
|
|
46.7
|
|
|
31.9
|
|
|
30.8
|
|
|
62.7
|
|
||||
Other & product liability
|
59.3
|
|
|
—
|
|
|
33.6
|
|
|
33.6
|
|
|
—
|
|
|
56.8
|
|
|
56.8
|
|
||||
Other commercial
|
17.7
|
|
|
0.3
|
|
|
4.8
|
|
|
5.1
|
|
|
1.3
|
|
|
27.3
|
|
|
28.6
|
|
||||
Total business
|
$
|
327.2
|
|
|
$
|
37.8
|
|
|
$
|
165.7
|
|
|
$
|
203.5
|
|
|
11.5
|
|
|
50.7
|
|
|
62.2
|
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
19.0
|
|
|
—
|
|
|
—
|
|
|
5.8
|
|
||||
Total Loss and LAE
|
$
|
327.2
|
|
|
$
|
37.8
|
|
|
$
|
165.7
|
|
|
$
|
222.5
|
|
|
11.5
|
|
|
50.7
|
|
|
68.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Net Written Premiums
|
|
|
|
|
|
||||||
E&S property
|
$
|
40.5
|
|
|
34.7
|
|
|
25.4
|
|
||
E&S casualty
|
60.9
|
|
|
42.0
|
|
|
36.1
|
|
|||
Programs
|
87.6
|
|
|
73.2
|
|
|
106.1
|
|
|||
Workers’ compensation
|
83.9
|
|
|
72.0
|
|
|
68.8
|
|
|||
Total specialty
|
$
|
272.9
|
|
|
$
|
221.9
|
|
|
$
|
236.4
|
|
|
|
|
|
|
|
($ millions)
Statutory Loss and LAE Ratios
|
Earned
Premium
|
|
Cat Loss
& ALAE
|
|
Non-Cat
Loss &
ALAE
|
|
Statutory
Loss &
LAE
|
|
Cat
loss
Ratio
|
|
Non-Cat
loss
Ratio
|
|
Total Loss
and LAE
Ratio
|
||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
E&S property
|
$
|
38.1
|
|
|
$
|
1.9
|
|
|
$
|
1.9
|
|
|
$
|
3.8
|
|
|
4.8
|
|
5.2
|
|
10.0
|
E&S casualty
|
48.6
|
|
|
—
|
|
|
20.0
|
|
|
20.0
|
|
|
—
|
|
41.3
|
|
41.3
|
||||
Programs
|
76.1
|
|
|
—
|
|
|
141.5
|
|
|
141.5
|
|
|
—
|
|
185.7
|
|
185.7
|
||||
Workers' compensation
|
78.1
|
|
|
—
|
|
|
45.9
|
|
|
45.9
|
|
|
—
|
|
58.8
|
|
58.8
|
||||
Total specialty
|
$
|
240.9
|
|
|
$
|
1.9
|
|
|
$
|
209.3
|
|
|
$
|
211.2
|
|
|
0.8
|
|
86.9
|
|
87.7
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|
—
|
|
—
|
|
3.3
|
||||
Total Loss and LAE
|
$
|
240.9
|
|
|
$
|
1.9
|
|
|
$
|
209.3
|
|
|
$
|
219.0
|
|
|
0.8
|
|
86.9
|
|
91.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
E&S property
|
$
|
31.1
|
|
|
$
|
1.3
|
|
|
$
|
3.9
|
|
|
$
|
5.2
|
|
|
4.2
|
|
12.5
|
|
16.7
|
E&S casualty
|
39.3
|
|
|
—
|
|
|
20.3
|
|
|
20.3
|
|
|
—
|
|
51.7
|
|
51.7
|
||||
Programs
|
87.1
|
|
|
0.1
|
|
|
87.4
|
|
|
87.5
|
|
|
0.2
|
|
100.2
|
|
100.4
|
||||
Workers' compensation
|
69.3
|
|
|
—
|
|
|
38.4
|
|
|
38.4
|
|
|
—
|
|
55.5
|
|
55.5
|
||||
Total specialty
|
$
|
226.8
|
|
|
$
|
1.4
|
|
|
$
|
150.0
|
|
|
$
|
151.4
|
|
|
0.6
|
|
66.2
|
|
66.8
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
7.3
|
|
|
—
|
|
—
|
|
3.2
|
||||
Total Loss and LAE
|
$
|
226.8
|
|
|
$
|
1.4
|
|
|
$
|
150.0
|
|
|
$
|
158.7
|
|
|
0.6
|
|
66.2
|
|
70.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
E&S property
|
$
|
20.4
|
|
|
$
|
0.3
|
|
|
$
|
1.0
|
|
|
$
|
1.3
|
|
|
1.6
|
|
4.8
|
|
6.4
|
E&S casualty
|
33.7
|
|
|
—
|
|
|
13.3
|
|
|
13.3
|
|
|
—
|
|
39.5
|
|
39.5
|
||||
Programs
|
124.2
|
|
|
2.1
|
|
|
136.3
|
|
|
138.4
|
|
|
1.6
|
|
109.9
|
|
111.5
|
||||
Workers' compensation
|
66.8
|
|
|
—
|
|
|
50.0
|
|
|
50.0
|
|
|
—
|
|
74.8
|
|
74.8
|
||||
Total specialty
|
$
|
245.1
|
|
|
$
|
2.4
|
|
|
$
|
200.6
|
|
|
$
|
203.0
|
|
|
1.0
|
|
81.8
|
|
82.8
|
ULAE
|
—
|
|
|
—
|
|
|
—
|
|
|
8.7
|
|
|
—
|
|
—
|
|
3.5
|
||||
Total Loss and LAE
|
$
|
245.1
|
|
|
$
|
2.4
|
|
|
$
|
200.6
|
|
|
$
|
211.7
|
|
|
1.0
|
|
81.8
|
|
86.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
%
GAAP Loss
and LAE Ratio
|
|
2013
|
|
%
GAAP Loss
and LAE Ratio
|
|
2012
|
|
%
GAAP Loss
and LAE Ratio
|
||||||||
Provision for losses and loss expenses occurring:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Current year
|
$
|
726.2
|
|
|
67.6
|
|
$
|
741.0
|
|
|
70.2
|
|
|
$
|
795.2
|
|
|
76.3
|
|
Prior years
|
45.1
|
|
|
4.2
|
|
(21.2
|
)
|
|
(2.0
|
)
|
|
(16.9
|
)
|
|
(1.6
|
)
|
|||
Total losses and loss expenses
|
$
|
771.3
|
|
|
71.8
|
|
$
|
719.8
|
|
|
68.2
|
|
|
$
|
778.3
|
|
|
74.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
Accident Year
|
Current Year
Development
of Ultimate Liability
|
||
|
Redundancy /(Deficiency)
|
||
2004 and prior
|
$
|
1.4
|
|
2005
|
0.3
|
|
|
2006
|
0.5
|
|
|
2007
|
0.5
|
|
|
2008
|
1.3
|
|
|
2009
|
3.9
|
|
|
2010
|
(4.5
|
)
|
|
2011
|
(21.4
|
)
|
|
2012
|
(37.2
|
)
|
|
2013
|
10.1
|
|
|
Total
|
$
|
(45.1
|
)
|
|
|
•
|
ULAE was $12.5 million lower than anticipated in the reserves at December 31, 2013.
|
•
|
We experienced favorable catastrophe loss development of $5.2 million in 2014 related to catastrophe losses primarily from accident year 2013.
|
•
|
In the personal and business insurance segments, the non-catastrophe loss and ALAE reserves contributed $23.1 million of favorable development. The business insurance segment contributed $16.7 million of this favorable development, driven by other & product liability and commercial auto, which developed favorably by $11.9 million and $5.3 million, respectively. The favorable development in these lines was driven by lower than anticipated severity from accident years 2012 and prior. The personal insurance segment contributed $6.4 million of this favorable development, primarily from accident year 2013.
|
•
|
In the specialty insurance segment, the non-catastrophe loss and ALAE reserves accounted for $85.9 million of adverse development related primarily to accident years 2011 and 2012, which was driven by RED reserve strengthening. Adverse development of prior accident year RED reserves was $96.7 million. Somewhat offsetting the unfavorable development of RED reserves was favorable development of $5.7 million in the Workers' compensation unit, $3.9 million in the E&S property unit and $2.1 million in the E&S casualty unit. Favorable development in these lines was driven by better than anticipated severity emerging primarily from the 2012 and 2013 accident years.
|
($ millions)
Accident Year
|
Current Year
Development
of Ultimate Liability
|
||
|
Redundancy /(Deficiency)
|
||
2003 and prior
|
$
|
(0.9
|
)
|
2004
|
0.9
|
|
|
2005
|
(0.1
|
)
|
|
2006
|
0.4
|
|
|
2007
|
1.3
|
|
|
2008
|
0.8
|
|
|
2009
|
4.8
|
|
|
2010
|
7.1
|
|
|
2011
|
2.8
|
|
|
2012
|
4.1
|
|
|
Total
|
$
|
21.2
|
|
|
|
•
|
ULAE was $8.0 million lower than anticipated in the reserves at December 31, 2012.
|
•
|
We experienced favorable catastrophe loss development of $5.4 million in 2013 related to catastrophe losses primarily from accident year 2012.
|
•
|
In the personal and business insurance segments, the non-catastrophe loss and ALAE reserves contributed $18.3 million of favorable development related to the prior four accident years, primarily in the other & product liability, commercial auto and homeowners with $8.3 million, $8.0 million and $2.9 million of the favorable development, respectively. The favorable development in these lines was driven by lower than anticipated severity in the casualty lines.
|
•
|
In the specialty insurance segment, the non-catastrophe loss and ALAE reserves contributed $10.5 million of adverse development related to the prior three accident years, which was driven by RED reserve strengthening. Somewhat offsetting the unfavorable development was favorable development of prior accident year non-catastrophe loss and ALAE reserves of $10.9 million in 2013, of which $12.3 million related to the Workers' compensation unit. The favorable Workers' compensation unit development was primarily attributable to better than anticipated severity emerging across all accident years, with approximately one third coming from accident year 2012. Adverse development of prior accident year RED reserves was $21.3 million, more than offsetting the favorable development reported by non-RED specialty insurance segment units.
|
($ millions)
Accident Year
|
Current Year
Development
of Ultimate Liability
|
||
|
Redundancy /(Deficiency)
|
||
2002 and prior
|
$
|
0.9
|
|
2003
|
0.2
|
|
|
2004
|
0.3
|
|
|
2005
|
—
|
|
|
2006
|
(0.1
|
)
|
|
2007
|
2.4
|
|
|
2008
|
2.3
|
|
|
2009
|
4.9
|
|
|
2010
|
8.0
|
|
|
2011
|
(2.0
|
)
|
|
Total
|
$
|
16.9
|
|
|
|
•
|
ULAE was $6.3 million lower than anticipated in the reserves at December 31, 2011.
|
•
|
We experienced favorable catastrophe loss development of $10.4 million in 2012 related to the higher level of catastrophe losses we experienced in accident year 2011.
|
•
|
In the personal and business insurance segments, the non-catastrophe loss and ALAE reserves contributed $28.0 million of favorable development related to the prior three accident years, primarily in the personal auto liability, other & product liability, and fire & allied lines with $10.5 million, $9.4 million and $5.1 million of the favorable development, respectively. The favorable development in these lines was driven by emergence of lower than anticipated claim severity.
|
•
|
In the specialty insurance segment, the non-catastrophe loss and ALAE reserves contributed $27.8 million of adverse development related to the prior two accident years, which was driven by RED reserve strengthening.
|
($ millions)
|
2014
|
|
2013
|
|
$
Change
|
||||||
Personal insurance segment:
|
|
|
|
|
|
||||||
Personal auto
|
$
|
176.0
|
|
|
$
|
188.8
|
|
|
$
|
(12.8
|
)
|
Homeowners
|
18.2
|
|
|
24.3
|
|
|
(6.1
|
)
|
|||
Other personal
|
7.7
|
|
|
10.6
|
|
|
(2.9
|
)
|
|||
Total personal
|
201.9
|
|
|
223.7
|
|
|
(21.8
|
)
|
|||
Business insurance segment:
|
|
|
|
|
|
||||||
Commercial auto
|
79.0
|
|
|
83.4
|
|
|
(4.4
|
)
|
|||
Commercial multi-peril
|
94.2
|
|
|
91.5
|
|
|
2.7
|
|
|||
Fire & allied lines
|
19.9
|
|
|
22.1
|
|
|
(2.2
|
)
|
|||
Other & product liability
|
154.2
|
|
|
159.8
|
|
|
(5.6
|
)
|
|||
Other business
|
2.5
|
|
|
2.8
|
|
|
(0.3
|
)
|
|||
Total business
|
349.8
|
|
|
359.6
|
|
|
(9.8
|
)
|
|||
Specialty insurance segment:
|
|
|
|
|
|
||||||
Excess & Surplus property
|
8.3
|
|
|
7.4
|
|
|
0.9
|
|
|||
Excess & Surplus casualty
|
69.9
|
|
|
61.1
|
|
|
8.8
|
|
|||
Programs
|
190.1
|
|
|
150.7
|
|
|
39.4
|
|
|||
Workers' compensation
|
153.6
|
|
|
148.3
|
|
|
5.3
|
|
|||
Total specialty
|
421.9
|
|
|
367.5
|
|
|
54.4
|
|
|||
Total losses and loss expenses payable net of reinsurance recoverable on losses and loss expenses payable
|
$
|
973.6
|
|
|
$
|
950.8
|
|
|
$
|
22.8
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
% of
Total
|
|
2013
|
|
% of
Total
|
||||||
Cash and cash equivalents
|
$
|
86.3
|
|
|
3.5
|
|
$
|
80.3
|
|
|
3.4
|
|
|
Fixed maturities, at fair value:
|
|
|
|
|
|
|
|
||||||
Fixed maturities
|
1,680.0
|
|
|
68.7
|
|
1,630.6
|
|
|
69.9
|
|
|||
Treasury inflation-protected securities
|
211.9
|
|
|
8.7
|
|
199.5
|
|
|
8.6
|
|
|||
Total fixed maturities
|
1,891.9
|
|
|
77.4
|
|
1,830.1
|
|
|
78.5
|
|
|||
Notes receivable from affiliate
(1)
|
70.0
|
|
|
2.9
|
|
70.0
|
|
|
3.0
|
|
|||
Equity securities, at fair value:
|
|
|
|
|
|
|
|
||||||
Large-cap securities
|
242.2
|
|
|
9.9
|
|
194.4
|
|
|
8.4
|
|
|||
Small-cap securities
|
68.2
|
|
|
2.8
|
|
70.9
|
|
|
3.0
|
|
|||
Total equity securities
|
310.4
|
|
|
12.7
|
|
265.3
|
|
|
11.4
|
|
|||
Other invested assets, at fair value:
|
|
|
|
|
|
|
|
||||||
International instruments
|
72.9
|
|
|
3.0
|
|
74.2
|
|
|
3.2
|
|
|||
Other invested assets
|
7.4
|
|
|
0.3
|
|
6.7
|
|
|
0.3
|
|
|||
Total other invested assets, at fair value
|
80.3
|
|
|
3.3
|
|
80.9
|
|
|
3.5
|
|
|||
Other invested assets, at cost
|
5.3
|
|
|
0.2
|
|
5.0
|
|
|
0.2
|
|
|||
Total portfolio
|
$
|
2,444.2
|
|
|
100.0
|
|
$
|
2,331.6
|
|
|
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
|
$
|
55.7
|
|
|
$
|
56.5
|
|
Due after 1 year through 5 years
|
369.8
|
|
|
382.4
|
|
||
Due after 5 years through 10 years
|
299.9
|
|
|
312.4
|
|
||
Due after 10 years
|
647.2
|
|
|
668.1
|
|
||
U.S. government agencies residential mortgage-backed securities
|
458.7
|
|
|
472.5
|
|
||
Total
|
$
|
1,831.3
|
|
|
$
|
1,891.9
|
|
|
|
|
|
($ millions)
|
Fair Value
|
||||||||||||||||||
|
-200 bps
Change |
|
-100 bps
Change |
|
Actual
|
|
+100 bps
Change |
|
+200 bps
Change |
||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
342.4
|
|
|
$
|
325.2
|
|
|
$
|
309.3
|
|
|
$
|
291.9
|
|
|
$
|
275.7
|
|
Obligations of states and political subdivisions
|
831.5
|
|
|
800.6
|
|
|
769.5
|
|
|
735.5
|
|
|
698.7
|
|
|||||
Corporate securities
|
372.2
|
|
|
359.5
|
|
|
340.6
|
|
|
331.7
|
|
|
317.9
|
|
|||||
U.S. government agencies residential mortgage-backed securities
|
488.6
|
|
|
484.4
|
|
|
472.5
|
|
|
454.8
|
|
|
434.3
|
|
|||||
Balance as of December 31, 2014
|
$
|
2,034.7
|
|
|
$
|
1,969.7
|
|
|
$
|
1,891.9
|
|
|
$
|
1,813.9
|
|
|
$
|
1,726.6
|
|
|
|
|
|
|
|
|
|
|
|
Large-cap equity portfolio:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value ($ millions)
|
|
$
|
289.3
|
|
|
$
|
265.7
|
|
|
$
|
242.2
|
|
|
$
|
218.6
|
|
|
$
|
195.0
|
|
Change in S&P 500 Index
|
|
+20%
|
|
|
+10%
|
|
|
—
|
|
|
-10
|
%
|
|
-20
|
%
|
|||||
Value as % of original value
|
|
119
|
%
|
|
110
|
%
|
|
100
|
%
|
|
90
|
%
|
|
81
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Fund 1:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value
($ millions)
|
|
$
|
37.5
|
|
|
$
|
35.2
|
|
|
$
|
32.9
|
|
|
$
|
30.7
|
|
|
$
|
28.4
|
|
Change in MSCI EAFE Index
|
|
+20%
|
|
|
+10%
|
|
|
—
|
|
|
-10
|
%
|
|
-20
|
%
|
|||||
Value as % of original value
|
|
114
|
%
|
|
107
|
%
|
|
100
|
%
|
|
93
|
%
|
|
86
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fund 2:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fair value
($ millions)
|
|
$
|
46.7
|
|
|
$
|
43.3
|
|
|
$
|
40.0
|
|
|
$
|
36.6
|
|
|
$
|
33.2
|
|
Change in MSCI EAFE Index
|
|
+20%
|
|
|
+10%
|
|
|
—
|
|
|
-10
|
%
|
|
-20
|
%
|
|||||
Value as % of original value
|
|
117
|
%
|
|
108
|
%
|
|
100
|
%
|
|
92
|
%
|
|
83
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
Year Ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Gross investment income:
|
|
|
|
|
|
||||||
Fixed maturities
|
$
|
64.3
|
|
|
$
|
63.2
|
|
|
$
|
66.9
|
|
Equity securities
|
6.2
|
|
|
6.0
|
|
|
4.9
|
|
|||
Other
|
6.2
|
|
|
5.7
|
|
|
5.6
|
|
|||
Total gross investment income
|
76.7
|
|
|
74.9
|
|
|
77.4
|
|
|||
Less: Investment expenses
|
2.0
|
|
|
2.1
|
|
|
2.0
|
|
|||
Net investment income
|
$
|
74.7
|
|
|
$
|
72.8
|
|
|
$
|
75.4
|
|
|
|
|
|
|
|
||||||
Average invested assets (at cost)
|
$
|
2,153.7
|
|
|
$
|
2,134.3
|
|
|
$
|
2,173.4
|
|
Annualized investment yield
|
3.5
|
%
|
|
3.4
|
%
|
|
3.5
|
%
|
|||
Annualized investment yield, after tax
|
2.6
|
%
|
|
2.7
|
%
|
|
2.7
|
%
|
|||
Net investment income, after tax
|
$
|
57.0
|
|
|
$
|
56.7
|
|
|
$
|
58.0
|
|
Effective tax rate
|
23.7
|
%
|
|
22.1
|
%
|
|
23.0
|
%
|
|||
|
|
|
|
|
|
•
|
Interest earned on our fixed maturity securities in 2014 increased slightly compared to 2013, primarily due to an increase of $0.9 million in Treasury Inflation-Protected Securities ("TIPS") interest income. Because TIPS are dependent on changes in the Consumer Price Index, they are directly impacted by the change in the rate of inflation (as inflation declines TIPS income decreases and vice versa). Income earned on our TIPS securities in 2013 decreased by $2.7 million when compared to 2012.
|
•
|
Interest rates generally declined in 2014 compared to 2013. As a result, the proceeds from bonds that matured, or were called by the issuers, were reinvested at lower rates.
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||||
|
Realized
gains
(losses)
|
|
Proceeds
received
on sale
|
|
Realized
gains
(losses)
|
|
Proceeds
received
on sale
|
|
Realized
gains
(losses)
|
|
Proceeds
received
on sale
|
||||||||||||
Realized gains:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed maturities
|
$
|
3.1
|
|
|
$
|
159.9
|
|
|
$
|
2.5
|
|
|
$
|
108.1
|
|
|
$
|
15.7
|
|
|
$
|
327.8
|
|
Equity securities
|
21.3
|
|
|
89.2
|
|
|
26.1
|
|
|
98.9
|
|
|
19.0
|
|
|
97.2
|
|
||||||
Other invested assets
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
||||||
Total realized gains
|
$
|
24.5
|
|
|
$
|
249.2
|
|
|
$
|
28.7
|
|
|
$
|
207.2
|
|
|
$
|
34.8
|
|
|
$
|
425.2
|
|
Realized losses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales
|
$
|
(1.3
|
)
|
|
$
|
10.4
|
|
|
$
|
(1.2
|
)
|
|
$
|
7.4
|
|
|
$
|
(2.6
|
)
|
|
$
|
7.3
|
|
OTTI
|
(2.5
|
)
|
|
—
|
|
|
(4.0
|
)
|
|
—
|
|
|
(3.2
|
)
|
|
—
|
|
||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
5.2
|
|
|
—
|
|
|
—
|
|
||||||
OTTI
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
||||||
Total realized losses
|
$
|
(3.8
|
)
|
|
$
|
10.4
|
|
|
$
|
(5.5
|
)
|
|
$
|
12.6
|
|
|
$
|
(6.0
|
)
|
|
$
|
7.3
|
|
Net realized gains on investments
|
$
|
20.7
|
|
|
$
|
259.6
|
|
|
$
|
23.2
|
|
|
$
|
219.8
|
|
|
$
|
28.8
|
|
|
$
|
432.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Number
of
positions
|
|
Total
impairment
|
|
Number
of
positions
|
|
Total
impairment
|
|
Number
of
positions
|
|
Total
impairment
|
|||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Large-cap securities
|
1
|
|
|
$
|
(0.3
|
)
|
|
2
|
|
|
$
|
(1.8
|
)
|
|
—
|
|
|
$
|
—
|
|
Small-cap securities
|
33
|
|
|
(2.2
|
)
|
|
26
|
|
|
(2.2
|
)
|
|
38
|
|
|
(3.2
|
)
|
|||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(0.2
|
)
|
|||
Total OTTI
|
34
|
|
|
$
|
(2.5
|
)
|
|
28
|
|
|
$
|
(4.0
|
)
|
|
39
|
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions, except number 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
|
$
|
296.7
|
|
|
$
|
14.1
|
|
|
28
|
|
|
$
|
(1.5
|
)
|
|
21
|
|
|
$
|
309.3
|
|
Obligations of states and political subdivisions
|
742.5
|
|
|
27.4
|
|
|
266
|
|
|
(0.4
|
)
|
|
14
|
|
|
769.5
|
|
||||
Corporate securities
|
333.4
|
|
|
10.2
|
|
|
66
|
|
|
(3.0
|
)
|
|
19
|
|
|
340.6
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
458.7
|
|
|
15.6
|
|
|
95
|
|
|
(1.8
|
)
|
|
21
|
|
|
472.5
|
|
||||
Total fixed maturities
|
1,831.3
|
|
|
67.3
|
|
|
455
|
|
|
(6.7
|
)
|
|
75
|
|
|
1,891.9
|
|
||||
Equity Securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Large-cap securities
|
185.5
|
|
|
57.3
|
|
|
30
|
|
|
(0.6
|
)
|
|
2
|
|
|
242.2
|
|
||||
Small-cap securities
|
50.0
|
|
|
18.2
|
|
|
72
|
|
|
—
|
|
|
—
|
|
|
68.2
|
|
||||
Total equity securities
|
235.5
|
|
|
75.5
|
|
|
102
|
|
|
(0.6
|
)
|
|
2
|
|
|
310.4
|
|
||||
Other invested assets
|
50.5
|
|
|
29.8
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
80.3
|
|
||||
Total available-for-sale investments
|
$
|
2,117.3
|
|
|
$
|
172.6
|
|
|
560
|
|
|
$
|
(7.3
|
)
|
|
77
|
|
|
$
|
2,282.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
$
Change
|
||||||
Available-for-sale investments
|
|
|
|
|
|
||||||
Unrealized gains:
|
|
|
|
|
|
||||||
Fixed maturities
|
$
|
60.6
|
|
|
$
|
26.1
|
|
|
$
|
34.5
|
|
Equity securities
|
74.9
|
|
|
68.7
|
|
|
6.2
|
|
|||
Other invested assets
|
29.8
|
|
|
31.4
|
|
|
(1.6
|
)
|
|||
Unrealized gains
|
165.3
|
|
|
126.2
|
|
|
39.1
|
|
|||
Deferred federal income tax liability
|
(55.3
|
)
|
|
(41.6
|
)
|
|
(13.7
|
)
|
|||
Unrealized gains, net of tax
|
$
|
110.0
|
|
|
$
|
84.6
|
|
|
$
|
25.4
|
|
|
|
|
|
|
|
•
|
The change in 2014 was primarily attributable to the level of purchases, sales and maturities in our investment portfolio in 2014 when compared to the same 2013 period.
|
•
|
The change in 2013 was primarily attributable to less sales proceeds of available for sale securities when compared to 2012, as well as, a lower level of call activity in 2013 compared to the same 2012 period.
|
•
|
In 2012, we continued to raise funds to complete the settlement of amounts owed in connection with the 12.31.11 pool change and the HO QS Arrangement.
|
($ millions)
|
Carrying
Value
|
|
Fair
Value
|
|
Interest
Rate
|
|||||
Subordinated Debentures due 2033: issued $15.5 million, May 2003 with variable interest adjusting quarterly
|
15.5
|
|
|
15.5
|
|
|
4.44
|
%
|
||
FHLB loan due 2033; issued $85.0 million, July 2013 with fixed interest
|
85.3
|
|
|
86.4
|
|
|
5.03
|
%
|
||
Total notes payable
|
$
|
100.8
|
|
|
$
|
101.9
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
Total
|
|
Due
1 year
or less
|
|
Due
1-3
years
|
|
Due
3-5
years
|
|
Due
after 5
years
|
||||||||||||
Direct loss and ALAE reserves
(1)
|
$
|
973.6
|
|
|
396.0
|
|
|
335.2
|
|
|
126.1
|
|
|
116.3
|
|
||||||
Notes payable
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subordinated Debentures due 2033:
issued $15.5, May 2003 with variable interest
(3)
adjusting
quarterly
|
15.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.5
|
|
|||||||
FHLB loan due 2033; issued $85.0 million, July 2013 with fixed interest
|
85.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
85.0
|
|
|||||||
Total notes payable
|
100.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
100.5
|
|
|||||||
Interest payable
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Subordinated Debentures due 2033:
issued $15.5, May 2003 with variable interest
(3)
adjusting
quarterly
|
12.7
|
|
|
0.7
|
|
|
1.4
|
|
|
1.4
|
|
|
9.2
|
|
|||||||
FHLB loan due 2033; issued $85.0 million, July 2013 with fixed interest
|
79.1
|
|
|
4.3
|
|
|
8.6
|
|
|
8.6
|
|
|
57.6
|
|
|||||||
Total interest payable
|
91.8
|
|
|
5.0
|
|
|
10.0
|
|
|
10.0
|
|
|
66.8
|
|
|||||||
Postretirement benefits
|
15.5
|
|
|
1.7
|
|
|
3.3
|
|
|
3.2
|
|
|
7.3
|
|
|||||||
Pension funding
(4)
|
56.9
|
|
|
5.5
|
|
|
10.9
|
|
|
11.7
|
|
|
28.8
|
|
|||||||
Total
|
$
|
1,238.3
|
|
|
$
|
408.2
|
|
|
$
|
359.4
|
|
|
$
|
151.0
|
|
|
$
|
319.7
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1)
|
We derived expected payment patterns separately for the direct loss and ALAE reserves. Amounts included the STFC Pooled Companies net additional share of transactions assumed from State Auto Mutual through the Pooling Arrangement. For a reconciliation of management’s best estimate, see “Critical Accounting Policies – Losses and Loss Expenses Payable” included in this Item 7. These patterns were applied to the December 31, 2013, loss and ALAE payable to generate estimated annual incremental loss and ALAE payments for each subsequent calendar year. These amounts are based on historical payment patterns and do not represent actual contractual obligations. The actual payment amounts and the related timing of those payments could differ significantly from these estimates.
|
||||||||||||||||||||
(2)
|
For a discussion of these debt instruments, see “Liquidity and Capital Resources—Borrowing Arrangements” included in this Item 7.
|
||||||||||||||||||||
(3)
|
Interest on the subordinated debentures was calculated using an interest rate equal to the three-month LIBOR rate at December 31, 2014 of 0.2356% plus 4.20%, or 4.4356%.
|
||||||||||||||||||||
(4)
|
These amounts are estimates of ERISA minimum funding levels based on adjustments to prior year assumptions for our defined benefit pension plan and do not represent an estimate of our expected contributions. Funding levels generally are not determined until later in the year with respect to the contribution year. See Note 9, “Pension and Postretirement Benefits Plans” to our consolidated financial statements included in Item 8 of this Form 10-K for a tabular presentation of STFC’s share of expected benefit payments from the State Auto Group’s defined benefit pension plan.
|
||||||||||||||||||||
|
|
|
Statutory Leverage Ratios
|
2014
|
|
2013
|
|
2012
|
||||
State Auto P&C
|
1.5
|
|
|
1.4
|
|
|
1.6
|
|
|
Milbank
|
1.9
|
|
|
1.7
|
|
|
2.2
|
|
|
Weighted Average
|
1.5
|
|
|
1.4
|
|
|
1.7
|
|
|
A.M. Best
|
|
Moody’s
|
|
Standard & Poor’s
|
State Auto Financial (credit rating)
|
bbb
|
|
N/A
|
|
BB+
|
|
negative outlook
|
|
|
|
negative outlook
|
State Auto Group (financial strength)
|
A
|
|
A3
|
|
BBB+
|
|
negative outlook
|
|
under review for downgrade
|
|
negative outlook
|
($ millions)
|
2014
|
|
2013
|
|||
Direct loss and ALAE reserve
:
|
|
|
|
|||
STFC Pooled Companies
|
$
|
477.8
|
|
|
509.1
|
|
Assumed by STFC Pooled Companies
|
472.7
|
|
|
451.0
|
|
|
Total direct loss and ALAE reserve
|
950.5
|
|
|
960.1
|
|
|
Direct ULAE reserve:
|
|
|
|
|||
STFC Pooled Companies
|
27.0
|
|
|
29.2
|
|
|
Assumed by STFC Pooled Companies
|
22.9
|
|
|
21.8
|
|
|
Total direct ULAE reserve
|
49.9
|
|
|
51.0
|
|
|
Direct salvage and subrogation recoverable
:
|
|
|
|
|||
STFC Pooled Companies
|
(20.4
|
)
|
|
(21.4
|
)
|
|
Assumed by STFC Pooled Companies
|
(3.4
|
)
|
|
(3.3
|
)
|
|
Total direct salvage and subrogation recoverable
|
(23.8
|
)
|
|
(24.7
|
)
|
|
Reinsurance recoverable
|
(9.6
|
)
|
|
(9.1
|
)
|
|
Assumed reinsurance
|
4.5
|
|
|
5.0
|
|
|
Reinsurance assumed by STFC Pooled Companies
|
2.1
|
|
|
(31.5
|
)
|
|
Total losses and loss expenses payable, net of reinsurance recoverable on losses and loss expenses payable of $9.6 million and $9.1 million in 2014 and 2013, respectively
|
$
|
973.6
|
|
|
950.8
|
|
|
|
|
|
($ millions)
|
Ending
Loss &
ALAE
Case &
Formula
|
|
Ending
Loss &
ALAE
IBNR
|
|
Ending
ULAE
Bulk
|
|
Total
Reserves
|
|||||
December 31, 2014
|
|
|
|
|||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|||||
Personal auto
|
$
|
114.1
|
|
|
52.7
|
|
|
9.2
|
|
|
176.0
|
|
Homeowners
|
12.1
|
|
|
4.2
|
|
|
1.9
|
|
|
18.2
|
|
|
Other personal
|
5.8
|
|
|
1.7
|
|
|
0.2
|
|
|
7.7
|
|
|
Total personal
|
132.0
|
|
|
58.6
|
|
|
11.3
|
|
|
201.9
|
|
|
Business insurance segment:
|
|
|
|
|
|
|
|
|||||
Commercial auto
|
43.9
|
|
|
31.7
|
|
|
3.4
|
|
|
79.0
|
|
|
Commercial multi-peril
|
43.7
|
|
|
45.3
|
|
|
5.2
|
|
|
94.2
|
|
|
Fire & allied lines
|
17.2
|
|
|
2.1
|
|
|
0.6
|
|
|
19.9
|
|
|
Other & product liability
|
46.2
|
|
|
94.0
|
|
|
14.0
|
|
|
154.2
|
|
|
Other commercial
|
1.4
|
|
|
1.0
|
|
|
0.1
|
|
|
2.5
|
|
|
Total business
|
152.4
|
|
|
174.1
|
|
|
23.3
|
|
|
349.8
|
|
|
Specialty insurance segment:
|
|
|
|
|
|
|
|
|||||
Excess & Surplus property
|
0.9
|
|
|
6.2
|
|
|
1.2
|
|
|
8.3
|
|
|
Excess & Surplus casualty
|
11.2
|
|
|
54.2
|
|
|
4.5
|
|
|
69.9
|
|
|
Programs
|
101.1
|
|
|
87.1
|
|
|
1.9
|
|
|
190.1
|
|
|
Workers' compensation
|
56.6
|
|
|
88.8
|
|
|
8.2
|
|
|
153.6
|
|
|
Total specialty
|
169.8
|
|
|
236.3
|
|
|
15.8
|
|
|
421.9
|
|
|
Total losses and loss expenses payable net of reinsurance recoverable on losses and loss expenses payable
|
$
|
454.2
|
|
|
469.0
|
|
|
50.4
|
|
|
973.6
|
|
|
|
|
|
|
|
|
|
($ millions)
|
Ending
Loss &
ALAE
Case &
Formula
|
|
Ending
Loss &
ALAE
IBNR
|
|
Ending
ULAE
Bulk
|
|
Total
Reserves
|
|||||
December 31, 2013
|
|
|
|
|||||||||
Personal insurance segment:
|
|
|
|
|
|
|
|
|||||
Personal auto
|
$
|
127.7
|
|
|
51.5
|
|
|
9.6
|
|
|
188.8
|
|
Homeowners
|
14.1
|
|
|
8.0
|
|
|
2.2
|
|
|
24.3
|
|
|
Other personal
|
7.4
|
|
|
3.0
|
|
|
0.2
|
|
|
10.6
|
|
|
Total personal
|
149.2
|
|
|
62.5
|
|
|
12.0
|
|
|
223.7
|
|
|
Business insurance segment:
|
|
|
|
|
|
|
|
|||||
Commercial auto
|
44.3
|
|
|
35.2
|
|
|
3.9
|
|
|
83.4
|
|
|
Commercial multi-peril
|
45.6
|
|
|
40.7
|
|
|
5.2
|
|
|
91.5
|
|
|
Fire & allied lines
|
18.7
|
|
|
2.8
|
|
|
0.6
|
|
|
22.1
|
|
|
Other & product liability
|
52.8
|
|
|
91.5
|
|
|
15.5
|
|
|
159.8
|
|
|
Other commercial
|
1.7
|
|
|
1.0
|
|
|
0.1
|
|
|
2.8
|
|
|
Total business
|
163.1
|
|
|
171.2
|
|
|
25.3
|
|
|
359.6
|
|
|
Specialty insurance segment:
|
|
|
|
|
|
|
|
|||||
Excess & Surplus property
|
0.6
|
|
|
6.0
|
|
|
0.8
|
|
|
7.4
|
|
|
Excess & Surplus casualty
|
11.3
|
|
|
46.2
|
|
|
3.6
|
|
|
61.1
|
|
|
Programs
|
87.5
|
|
|
62.0
|
|
|
1.2
|
|
|
150.7
|
|
|
Workers' compensation
|
60.7
|
|
|
78.9
|
|
|
8.7
|
|
|
148.3
|
|
|
Total specialty
|
160.1
|
|
|
193.1
|
|
|
14.3
|
|
|
367.5
|
|
|
Total losses and loss expenses payable net of reinsurance recoverable on losses and loss expenses payable
|
$
|
472.4
|
|
|
426.8
|
|
|
51.6
|
|
|
950.8
|
|
|
|
|
|
|
|
|
|
($ millions)
|
Pension
|
|
Postretirement
|
||||||||||||||||
|
Discount rate
|
|
Discount rate
|
||||||||||||||||
|
(0.25)%
|
|
3.85%
|
|
0.25%
|
|
(0.25)%
|
|
3.85%
|
|
0.25%
|
||||||||
Benefit obligation
|
$
|
304.5
|
|
|
292.5
|
|
|
281.2
|
|
|
$
|
24.5
|
|
|
23.9
|
|
|
23.3
|
|
Net periodic benefit cost (benefit)
|
$
|
17.2
|
|
|
16.0
|
|
|
14.8
|
|
|
$
|
(4.0
|
)
|
|
(4.1
|
)
|
|
(4.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expected return on plan assets
|
|
|
|
|
|
|
||||||||||||
|
(0.25)%
|
|
7.00%
|
|
0.25%
|
|
|
|
|
|
|
||||||||
Net periodic benefit cost
|
$
|
16.5
|
|
|
16.0
|
|
|
15.5
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Income before federal income taxes
|
$
|
26.8
|
|
|
$
|
61.3
|
|
|
|
|
|
||||
Current tax expense
|
0.1
|
|
|
0.5
|
|
||
Deferred tax expense
|
1.9
|
|
|
11.8
|
|
||
|
2.0
|
|
|
12.3
|
|
||
Valuation allowance
|
(82.6
|
)
|
|
(11.8
|
)
|
||
Total federal income tax (benefit) expense
|
(80.6
|
)
|
|
0.5
|
|
||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Continuing operations
|
$
|
(82.6
|
)
|
|
$
|
(11.8
|
)
|
Other comprehensive income
|
—
|
|
|
(6.1
|
)
|
||
Change in valuation allowance
|
$
|
(82.6
|
)
|
|
$
|
(17.9
|
)
|
|
|
|
|
/s/ Ernst & Young LLP
|
|
|
Columbus, Ohio
|
|
|
March 3, 2015
|
|
|
/s/ Ernst & Young LLP
|
|
|
Columbus, Ohio
|
|
|
March 3, 2015
|
|
|
($ and shares in millions, except per share amounts)
|
December 31
|
||||||
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Fixed maturities, available-for-sale, at fair value (amortized cost $1,831.3 and $1,804.0, respectively)
|
$
|
1,891.9
|
|
|
$
|
1,830.1
|
|
Equity securities, available-for-sale, at fair value (cost $235.5 and $196.6, respectively)
|
310.4
|
|
|
265.3
|
|
||
Other invested assets, available-for-sale, at fair value (cost $50.5 and $49.5, respectively)
|
80.3
|
|
|
80.9
|
|
||
Other invested assets
|
5.3
|
|
|
5.0
|
|
||
Notes receivable from affiliate
|
70.0
|
|
|
70.0
|
|
||
Total investments
|
2,357.9
|
|
|
2,251.3
|
|
||
Cash and cash equivalents
|
86.3
|
|
|
80.3
|
|
||
Accrued investment income and other assets
|
33.8
|
|
|
33.6
|
|
||
Deferred policy acquisition costs (affiliated net assumed $46.8 and $19.2, respectively)
|
126.5
|
|
|
96.8
|
|
||
Reinsurance recoverable on losses and loss expenses payable
|
9.6
|
|
|
9.1
|
|
||
Prepaid reinsurance premiums
|
6.1
|
|
|
4.7
|
|
||
Due from affiliate
|
40.1
|
|
|
—
|
|
||
Current federal income taxes
|
1.1
|
|
|
0.3
|
|
||
Net deferred federal income taxes
|
97.4
|
|
|
11.9
|
|
||
Property and equipment, at cost (net of accumulated depreciation of $6.1 and $5.8, respectively)
|
8.1
|
|
|
8.4
|
|
||
Total assets
|
$
|
2,766.9
|
|
|
$
|
2,496.4
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Losses and loss expenses payable (affiliated net assumed $494.3 and $438.0, respectively)
|
$
|
983.2
|
|
|
959.9
|
|
|
Unearned premiums (affiliated net assumed $201.7 and $78.4, respectively)
|
612.4
|
|
|
491.0
|
|
||
Notes payable (affiliates $15.5 and $15.5, respectively)
|
100.8
|
|
|
100.8
|
|
||
Postretirement and pension benefits (affiliated net ceded $63.2 and $37.3, respectively)
|
117.3
|
|
|
71.6
|
|
||
Due to affiliate
|
—
|
|
|
1.3
|
|
||
Other liabilities (affiliated net ceded $5.1 and affiliated net assumed $20.0, respectively)
|
80.3
|
|
|
86.8
|
|
||
Total liabilities
|
1,894.0
|
|
|
1,711.4
|
|
||
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; 47.7 and 47.5 shares issued, respectively, at stated value of $2.50 per share
|
119.3
|
|
|
118.8
|
|
||
Treasury stock, 6.8 and 6.8 shares, respectively, at cost
|
(116.0
|
)
|
|
(115.9
|
)
|
||
Additional paid-in capital
|
143.2
|
|
|
137.5
|
|
||
Accumulated other comprehensive income (affiliated net ceded $65.1 and $41.0, respectively)
|
71.7
|
|
|
80.8
|
|
||
Retained earnings
|
654.7
|
|
|
563.8
|
|
||
Total stockholders’ equity
|
872.9
|
|
|
785.0
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,766.9
|
|
|
$
|
2,496.4
|
|
|
|
|
|
($ millions, except per share amounts)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Earned premiums (affiliated net assumed $212.4, $200.0 and $232.9, respectively)
|
$
|
1,074.1
|
|
|
$
|
1,055.0
|
|
|
$
|
1,042.1
|
|
Net investment income (affiliates $4.9, $4.9 and $4.9, respectively)
|
74.7
|
|
|
72.8
|
|
|
75.4
|
|
|||
Net realized gain on investments:
|
|
|
|
|
|
||||||
Total other-than-temporary impairment losses
|
(2.5
|
)
|
|
(4.0
|
)
|
|
(3.4
|
)
|
|||
Portion of loss recognized in other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other net realized investment gains
|
23.2
|
|
|
27.2
|
|
|
32.4
|
|
|||
Total net realized gain on investments
|
20.7
|
|
|
23.2
|
|
|
29.0
|
|
|||
Other income (affiliates $1.9, $2.0 and $3.6, respectively)
|
3.2
|
|
|
2.0
|
|
|
3.6
|
|
|||
Total revenues
|
1,172.7
|
|
|
1,153.0
|
|
|
1,150.1
|
|
|||
Losses and loss expenses (affiliated net assumed $250.8, $162.5 and $203.7, respectively)
|
771.3
|
|
|
719.8
|
|
|
778.3
|
|
|||
Acquisition and operating expenses (affiliated net assumed $156.9, $172.7 and $190.8, respectively)
|
361.9
|
|
|
354.8
|
|
|
345.9
|
|
|||
Interest expense (affiliates $0.7, $0.7 and $0.7, respectively)
|
5.4
|
|
|
8.5
|
|
|
7.0
|
|
|||
Other expenses
|
7.3
|
|
|
8.6
|
|
|
8.3
|
|
|||
Total expenses
|
1,145.9
|
|
|
1,091.7
|
|
|
1,139.5
|
|
|||
Income before federal income taxes
|
26.8
|
|
|
61.3
|
|
|
10.6
|
|
|||
Federal income tax (benefit) expense:
|
|
|
|
|
|
||||||
Current
|
0.1
|
|
|
0.5
|
|
|
(0.1
|
)
|
|||
Deferred
|
(80.7
|
)
|
|
—
|
|
|
—
|
|
|||
Total federal income tax (benefit) expense
|
(80.6
|
)
|
|
0.5
|
|
|
(0.1
|
)
|
|||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
2.63
|
|
|
$
|
1.50
|
|
|
$
|
0.26
|
|
Diluted
|
$
|
2.60
|
|
|
$
|
1.49
|
|
|
$
|
0.26
|
|
Dividends paid per common share
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.55
|
|
|
|
|
|
|
|
($ millions)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Net unrealized holding gains (losses) on investments:
|
|
|
|
|
|
||||||
Unrealized holding gains (losses) arising during year
|
59.8
|
|
|
(27.1
|
)
|
|
53.5
|
|
|||
Reclassification adjustments for gains realized in net income
|
(20.7
|
)
|
|
(23.2
|
)
|
|
(28.8
|
)
|
|||
Income tax (expense) benefit
|
(13.7
|
)
|
|
10.9
|
|
|
0.6
|
|
|||
Total net unrealized holding gains (losses) on investments
|
25.4
|
|
|
(39.4
|
)
|
|
25.3
|
|
|||
Amortization of gain on derivative used in cash flow hedge
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Net unrecognized benefit plan obligations:
|
|
|
|
|
|
||||||
Net actuarial (loss) gain arising during period
|
(54.4
|
)
|
|
32.5
|
|
|
(7.4
|
)
|
|||
Reclassification adjustments for amortization to statements of income:
|
|
|
|
|
|
||||||
Negative prior service cost
|
(5.5
|
)
|
|
(5.5
|
)
|
|
(5.2
|
)
|
|||
Net actuarial loss
|
6.9
|
|
|
9.1
|
|
|
7.8
|
|
|||
Income tax benefit
|
18.5
|
|
|
—
|
|
|
—
|
|
|||
Total net unrecognized benefit plan obligations
|
(34.5
|
)
|
|
36.1
|
|
|
(4.8
|
)
|
|||
Other comprehensive (loss) income
|
(9.1
|
)
|
|
(3.4
|
)
|
|
20.4
|
|
|||
Comprehensive income
|
$
|
98.3
|
|
|
$
|
57.4
|
|
|
$
|
31.1
|
|
|
|
|
|
|
|
(in millions)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Common shares:
|
|
|
|
|
|
||||||
Balance at beginning of year
|
47.5
|
|
|
47.3
|
|
|
47.1
|
|
|||
Issuance of shares
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||
Balance at end of year
|
47.7
|
|
|
47.5
|
|
|
47.3
|
|
|||
Treasury shares:
|
|
|
|
||||||||
Balance at beginning of year
|
(6.8
|
)
|
|
(6.8
|
)
|
|
(6.8
|
)
|
|||
Balance at end of year
|
(6.8
|
)
|
|
(6.8
|
)
|
|
(6.8
|
)
|
|||
Common stock:
|
|
|
|
||||||||
Balance at beginning of year
|
$
|
118.8
|
|
|
$
|
118.1
|
|
|
$
|
117.8
|
|
Issuance of shares
|
0.5
|
|
|
0.7
|
|
|
0.3
|
|
|||
Balance at end of year
|
$
|
119.3
|
|
|
$
|
118.8
|
|
|
$
|
118.1
|
|
Treasury stock:
|
|
|
|
||||||||
Balance at beginning of year
|
$
|
(115.9
|
)
|
|
(115.8
|
)
|
|
(115.8
|
)
|
||
Shares acquired on stock option exercises and vested restricted shares
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
(116.0
|
)
|
|
$
|
(115.9
|
)
|
|
$
|
(115.8
|
)
|
Additional paid-in capital:
|
|
|
|
||||||||
Balance at beginning of year
|
$
|
137.5
|
|
|
$
|
131.6
|
|
|
$
|
127.3
|
|
Issuance of common stock
|
2.9
|
|
|
3.4
|
|
|
1.3
|
|
|||
Stock options granted
|
2.8
|
|
|
2.5
|
|
|
3.0
|
|
|||
Balance at end of year
|
$
|
143.2
|
|
|
$
|
137.5
|
|
|
$
|
131.6
|
|
Accumulated other comprehensive income:
|
|
|
|
||||||||
Balance at beginning of year
|
$
|
80.8
|
|
|
$
|
84.2
|
|
|
$
|
63.8
|
|
Change in unrealized holding gains (losses) on investments, net of tax
|
25.4
|
|
|
(39.4
|
)
|
|
25.3
|
|
|||
Amortization of gain on derivative used in cash flow hedge
|
—
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|||
Change in unrecognized benefit plan obligations, net of tax and reclassification adjustments
|
(34.5
|
)
|
|
36.1
|
|
|
(4.8
|
)
|
|||
Balance at end of year
|
$
|
71.7
|
|
|
$
|
80.8
|
|
|
$
|
84.2
|
|
Retained earnings:
|
|
|
|
||||||||
Balance at beginning of year
|
$
|
563.8
|
|
|
$
|
519.1
|
|
|
$
|
530.7
|
|
Net income
|
107.4
|
|
|
60.8
|
|
|
10.7
|
|
|||
Cash dividends paid (affiliates $10.2, $10.1 and $13.9, respectively)
|
$
|
(16.5
|
)
|
|
(16.1
|
)
|
|
(22.3
|
)
|
||
Balance at end of year
|
654.7
|
|
|
563.8
|
|
|
519.1
|
|
|||
Total stockholders’ equity at end of year
|
$
|
872.9
|
|
|
$
|
785.0
|
|
|
$
|
737.2
|
|
|
|
|
|
|
|
($ millions)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization, net
|
11.7
|
|
|
13.5
|
|
|
7.1
|
|
|||
Share-based compensation
|
3.6
|
|
|
4.1
|
|
|
3.5
|
|
|||
Net realized gain on investments
|
(20.7
|
)
|
|
(23.2
|
)
|
|
(29.0
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Deferred policy acquisition (benefits) costs
|
(29.7
|
)
|
|
(5.1
|
)
|
|
—
|
|
|||
Accrued investment income and other assets
|
0.2
|
|
|
(2.3
|
)
|
|
(1.4
|
)
|
|||
Postretirement and pension benefits
|
(7.3
|
)
|
|
(5.3
|
)
|
|
(4.6
|
)
|
|||
Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums
|
(1.9
|
)
|
|
3.6
|
|
|
16.0
|
|
|||
Other liabilities and due to/from affiliates, net
|
(50.8
|
)
|
|
(0.9
|
)
|
|
(9.8
|
)
|
|||
Losses and loss expenses payable
|
23.3
|
|
|
17.7
|
|
|
35.1
|
|
|||
Unearned premiums
|
121.4
|
|
|
9.4
|
|
|
11.4
|
|
|||
Excess tax benefits on share-based awards
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Federal income taxes
|
(81.6
|
)
|
|
(0.3
|
)
|
|
12.3
|
|
|||
Cash used in December 31, 2011 unearned premium transfer related to the homeowners quota-share reinsurance arrangement
|
—
|
|
|
—
|
|
|
(75.5
|
)
|
|||
Cash used in pooling changes, December 31, 2011 and January 1, 2011
|
—
|
|
|
—
|
|
|
(261.4
|
)
|
|||
Net cash provided by (used in) operating activities
|
$
|
75.6
|
|
|
$
|
72.1
|
|
|
$
|
(285.6
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of fixed maturities available-for-sale
|
$
|
(431.4
|
)
|
|
$
|
(326.7
|
)
|
|
$
|
(540.4
|
)
|
Purchases of equity securities available-for-sale
|
(119.0
|
)
|
|
(86.0
|
)
|
|
(143.0
|
)
|
|||
Purchases of other invested assets
|
(1.8
|
)
|
|
(5.5
|
)
|
|
(1.1
|
)
|
|||
Maturities, calls and pay downs of fixed maturities available-for-sale
|
232.4
|
|
|
174.6
|
|
|
257.0
|
|
|||
Sales of fixed maturities available-for-sale
|
163.5
|
|
|
113.3
|
|
|
332.8
|
|
|||
Sales of equity securities available-for-sale
|
99.2
|
|
|
106.4
|
|
|
101.8
|
|
|||
Sales of other invested assets available-for-sale
|
0.6
|
|
|
0.7
|
|
|
0.7
|
|
|||
Net additions of property and equipment
|
—
|
|
|
0.2
|
|
|
1.5
|
|
|||
Net cash (used in) provided by investing activities
|
$
|
(56.5
|
)
|
|
$
|
(23.0
|
)
|
|
$
|
9.3
|
|
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
$
|
3.5
|
|
|
$
|
4.0
|
|
|
$
|
1.6
|
|
Payments to acquire treasury stock
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Payments of dividends (affiliates $10.2, $10.1 and $13.9, respectively)
|
(16.5
|
)
|
|
(16.1
|
)
|
|
(22.3
|
)
|
|||
Payment of credit facility issue costs
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|||
Excess tax benefits on share-based awards
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
85.0
|
|
|
—
|
|
|||
Redemption of long-term debt
|
—
|
|
|
(100.0
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
$
|
(13.1
|
)
|
|
$
|
(27.8
|
)
|
|
$
|
(20.7
|
)
|
Net increase (decrease) in cash and cash equivalents
|
6.0
|
|
|
21.3
|
|
|
(297.0
|
)
|
|||
Cash and cash equivalents at beginning of year
|
80.3
|
|
|
59.0
|
|
|
356.0
|
|
|||
Cash and cash equivalents at end of year
|
$
|
86.3
|
|
|
$
|
80.3
|
|
|
$
|
59.0
|
|
Supplemental disclosures:
|
|
|
|
|
|
||||||
Interest paid (affiliates $0.7, $0.7 and $0.7, respectively)
|
$
|
5.2
|
|
|
$
|
8.5
|
|
|
$
|
7.0
|
|
Federal income taxes paid (received)
|
$
|
1.0
|
|
|
$
|
0.8
|
|
|
$
|
(12.4
|
)
|
|
|
|
|
|
|
•
|
State Auto Property and Casualty Insurance Company (“State Auto P&C”), an Iowa corporation
|
•
|
Milbank Insurance Company (“Milbank”), an Iowa corporation
|
•
|
State Auto Insurance Company of Ohio (“SA Ohio”), an Ohio corporation
|
•
|
Stateco Financial Services, Inc. (“Stateco”), an Ohio corporation
|
|
|
($ millions)
|
|
2014
|
|
2013
|
|
2012
|
||||||
Balance, beginning of year
|
|
$
|
96.8
|
|
|
$
|
91.7
|
|
|
$
|
91.7
|
|
Acquisition costs deferred
|
|
251.5
|
|
|
214.6
|
|
|
213.1
|
|
|||
Acquisition costs amortized to expense
|
|
(221.8
|
)
|
|
(209.5
|
)
|
|
(213.1
|
)
|
|||
Balance, end of year
|
|
$
|
126.5
|
|
|
$
|
96.8
|
|
|
$
|
91.7
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
holding
gains
|
|
Gross
unrealized
holding
losses
|
|
Fair
value
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
|
$
|
296.7
|
|
|
$
|
14.1
|
|
|
$
|
(1.5
|
)
|
|
$
|
309.3
|
|
Obligations of states and political subdivisions
|
|
742.5
|
|
|
27.4
|
|
|
(0.4
|
)
|
|
769.5
|
|
||||
Corporate securities
|
|
333.4
|
|
|
10.2
|
|
|
(3.0
|
)
|
|
340.6
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
|
458.7
|
|
|
15.6
|
|
|
(1.8
|
)
|
|
472.5
|
|
||||
Total fixed maturities
|
|
1,831.3
|
|
|
67.3
|
|
|
(6.7
|
)
|
|
1,891.9
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
|
185.5
|
|
|
57.3
|
|
|
(0.6
|
)
|
|
242.2
|
|
||||
Small-cap securities
|
|
50.0
|
|
|
18.2
|
|
|
—
|
|
|
68.2
|
|
||||
Total equity securities
|
|
235.5
|
|
|
75.5
|
|
|
(0.6
|
)
|
|
310.4
|
|
||||
Other invested assets
|
|
50.5
|
|
|
29.8
|
|
|
—
|
|
|
80.3
|
|
||||
Total available-for-sale securities
|
|
$
|
2,117.3
|
|
|
$
|
172.6
|
|
|
$
|
(7.3
|
)
|
|
$
|
2,282.6
|
|
|
|
|
|
|
|
|
|
|
December 31, 2013
|
|
Cost or
amortized
cost
|
|
Gross
unrealized
holding
gains
|
|
Gross
unrealized
holding
losses
|
|
Fair
value
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
|
$
|
345.5
|
|
|
$
|
13.4
|
|
|
$
|
(6.5
|
)
|
|
$
|
352.4
|
|
Obligations of states and political subdivisions
|
|
765.3
|
|
|
25.8
|
|
|
(16.9
|
)
|
|
774.2
|
|
||||
Corporate securities
|
|
345.0
|
|
|
11.4
|
|
|
(6.7
|
)
|
|
349.7
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
|
348.2
|
|
|
9.7
|
|
|
(4.1
|
)
|
|
353.8
|
|
||||
Total fixed maturities
|
|
1,804.0
|
|
|
60.3
|
|
|
(34.2
|
)
|
|
1,830.1
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
|
148.2
|
|
|
46.5
|
|
|
(0.3
|
)
|
|
194.4
|
|
||||
Small-cap securities
|
|
48.4
|
|
|
22.5
|
|
|
—
|
|
|
70.9
|
|
||||
Total equity securities
|
|
196.6
|
|
|
69.0
|
|
|
(0.3
|
)
|
|
265.3
|
|
||||
Other invested assets
|
|
49.5
|
|
|
31.4
|
|
|
—
|
|
|
80.9
|
|
||||
Total available-for-sale securities
|
|
$
|
2,050.1
|
|
|
$
|
160.7
|
|
|
$
|
(34.5
|
)
|
|
$
|
2,176.3
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||||
December 31, 2014
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
positions
|
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
positions
|
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
positions
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
19.9
|
|
|
$
|
(0.3
|
)
|
|
4
|
|
|
$
|
52.0
|
|
|
$
|
(1.2
|
)
|
|
17
|
|
|
$
|
71.9
|
|
|
$
|
(1.5
|
)
|
|
21
|
|
Obligations of states and political subdivisions
|
6.1
|
|
|
—
|
|
|
5
|
|
|
30.9
|
|
|
(0.4
|
)
|
|
9
|
|
|
37.0
|
|
|
(0.4
|
)
|
|
14
|
|
||||||
Corporate securities
|
43.5
|
|
|
(0.9
|
)
|
|
8
|
|
|
56.1
|
|
|
(2.1
|
)
|
|
11
|
|
|
99.6
|
|
|
(3.0
|
)
|
|
19
|
|
||||||
U.S. government agencies residential mortgage-backed securities
|
44.0
|
|
|
(0.3
|
)
|
|
8
|
|
|
37.5
|
|
|
(1.5
|
)
|
|
13
|
|
|
81.5
|
|
|
(1.8
|
)
|
|
21
|
|
||||||
Total fixed maturities
|
113.5
|
|
|
(1.5
|
)
|
|
25
|
|
|
176.5
|
|
|
(5.2
|
)
|
|
50
|
|
|
290.0
|
|
|
(6.7
|
)
|
|
75
|
|
||||||
Large-cap equity securities
|
7.2
|
|
|
(0.6
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.2
|
|
|
(0.6
|
)
|
|
2
|
|
||||||
Total temporarily impaired securities
|
$
|
120.7
|
|
|
$
|
(2.1
|
)
|
|
27
|
|
|
$
|
176.5
|
|
|
$
|
(5.2
|
)
|
|
50
|
|
|
$
|
297.2
|
|
|
$
|
(7.3
|
)
|
|
77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months
|
|
12 months or more
|
|
Total
|
|||||||||||||||||||||||||||
December 31, 2013
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
positions
|
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
positions
|
|
Fair
value
|
|
Unrealized
losses
|
|
Number
of
positions
|
|||||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
109.6
|
|
|
$
|
(6.5
|
)
|
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
109.6
|
|
|
$
|
(6.5
|
)
|
|
29
|
|
Obligations of states and political subdivisions
|
206.4
|
|
|
(14.7
|
)
|
|
76
|
|
|
25.6
|
|
|
(2.2
|
)
|
|
7
|
|
|
232.0
|
|
|
(16.9
|
)
|
|
83
|
|
||||||
Corporate securities
|
105.6
|
|
|
(3.2
|
)
|
|
22
|
|
|
40.9
|
|
|
(3.5
|
)
|
|
8
|
|
|
146.5
|
|
|
(6.7
|
)
|
|
30
|
|
||||||
U.S. government agencies residential mortgage-backed securities
|
103.6
|
|
|
(3.3
|
)
|
|
25
|
|
|
19.3
|
|
|
(0.8
|
)
|
|
10
|
|
|
122.9
|
|
|
(4.1
|
)
|
|
35
|
|
||||||
Total fixed maturities
|
525.2
|
|
|
(27.7
|
)
|
|
152
|
|
|
85.8
|
|
|
(6.5
|
)
|
|
25
|
|
|
611.0
|
|
|
(34.2
|
)
|
|
177
|
|
||||||
Large-cap equity securities
|
5.3
|
|
|
(0.3
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5.3
|
|
|
(0.3
|
)
|
|
2
|
|
||||||
Total temporarily impaired securities
|
$
|
530.5
|
|
|
$
|
(28.0
|
)
|
|
154
|
|
|
$
|
85.8
|
|
|
$
|
(6.5
|
)
|
|
25
|
|
|
$
|
616.3
|
|
|
$
|
(34.5
|
)
|
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Equity securities:
|
|
|
|
|
|
||||||
Large-cap securities
|
$
|
(0.3
|
)
|
|
$
|
(1.8
|
)
|
|
$
|
—
|
|
Small-cap securities
|
(2.2
|
)
|
|
(2.2
|
)
|
|
(3.2
|
)
|
|||
Fixed maturities
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Total other-than-temporary impairments
|
$
|
(2.5
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
($ millions)
|
Amortized
cost
|
|
Fair
value
|
||||
Due in 1 year or less
|
$
|
55.7
|
|
|
$
|
56.5
|
|
Due after 1 year through 5 years
|
369.8
|
|
|
382.4
|
|
||
Due after 5 years through 10 years
|
299.9
|
|
|
312.4
|
|
||
Due after 10 years
|
647.2
|
|
|
668.1
|
|
||
U.S. government agencies residential mortgage-backed securities
|
458.7
|
|
|
472.5
|
|
||
Total
|
$
|
1,831.3
|
|
|
$
|
1,891.9
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Fixed maturities
|
$
|
64.3
|
|
|
$
|
63.2
|
|
|
$
|
66.9
|
|
Equity securities
|
6.2
|
|
|
6.0
|
|
|
4.9
|
|
|||
Cash and cash equivalents, and other
|
6.2
|
|
|
5.7
|
|
|
5.6
|
|
|||
Investment income
|
76.7
|
|
|
74.9
|
|
|
77.4
|
|
|||
Investment expenses
|
2.0
|
|
|
2.1
|
|
|
2.0
|
|
|||
Net investment income
|
$
|
74.7
|
|
|
$
|
72.8
|
|
|
$
|
75.4
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Realized gains:
|
|
|
|
|
|
||||||
Fixed maturities
|
$
|
3.1
|
|
|
$
|
2.5
|
|
|
$
|
15.7
|
|
Equity securities
|
21.3
|
|
|
26.1
|
|
|
19.0
|
|
|||
Other invested assets
|
0.1
|
|
|
0.1
|
|
|
0.1
|
|
|||
Total realized gains
|
24.5
|
|
|
28.7
|
|
|
34.8
|
|
|||
Realized losses:
|
|
|
|
|
|
||||||
Equity securities:
|
|
|
|
|
|
||||||
Sales
|
(1.3
|
)
|
|
(1.2
|
)
|
|
(2.6
|
)
|
|||
OTTI
|
(2.5
|
)
|
|
(4.0
|
)
|
|
(3.2
|
)
|
|||
Fixed maturities:
|
|
|
|
|
|
||||||
Sales
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|||
OTTI
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
Total realized losses
|
(3.8
|
)
|
|
(5.5
|
)
|
|
(6.0
|
)
|
|||
Net realized gains on investments
|
$
|
20.7
|
|
|
$
|
23.2
|
|
|
$
|
28.8
|
|
Change in unrealized holding gains (losses), net of tax:
|
|
|
|
|
|
||||||
Fixed maturities
|
$
|
34.5
|
|
|
$
|
(102.8
|
)
|
|
$
|
11.3
|
|
Equity securities
|
6.2
|
|
|
36.5
|
|
|
6.6
|
|
|||
Other invested assets
|
(1.6
|
)
|
|
16.0
|
|
|
6.8
|
|
|||
Deferred federal income tax
|
(13.7
|
)
|
|
17.6
|
|
|
(8.6
|
)
|
|||
Valuation allowance
|
—
|
|
|
(6.7
|
)
|
|
9.2
|
|
|||
Change in unrealized holding gains (losses), net of tax
|
$
|
25.4
|
|
|
$
|
(39.4
|
)
|
|
$
|
25.3
|
|
|
|
|
|
|
|
•
|
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)
|
||||||||
December 31, 2014
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
309.3
|
|
|
$
|
—
|
|
|
$
|
309.3
|
|
|
$
|
—
|
|
Obligations of states and political subdivisions
|
769.5
|
|
|
—
|
|
|
769.5
|
|
|
—
|
|
||||
Corporate securities
|
340.6
|
|
|
—
|
|
|
331.2
|
|
|
9.4
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
472.5
|
|
|
—
|
|
|
472.5
|
|
|
—
|
|
||||
Total fixed maturities
|
1,891.9
|
|
|
—
|
|
|
1,882.5
|
|
|
9.4
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
242.2
|
|
|
242.2
|
|
|
—
|
|
|
—
|
|
||||
Small-cap securities
|
68.2
|
|
|
68.2
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
310.4
|
|
|
310.4
|
|
|
—
|
|
|
—
|
|
||||
Other invested assets
|
80.3
|
|
|
7.4
|
|
|
72.9
|
|
|
—
|
|
||||
Total available-for-sale investments
|
$
|
2,282.6
|
|
|
$
|
317.8
|
|
|
$
|
1,955.4
|
|
|
$
|
9.4
|
|
|
|
|
|
|
|
|
|
($ 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, 2013
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
352.4
|
|
|
$
|
—
|
|
|
$
|
352.4
|
|
|
$
|
—
|
|
Obligations of states and political subdivisions
|
774.2
|
|
|
—
|
|
|
774.2
|
|
|
—
|
|
||||
Corporate securities
|
349.7
|
|
|
—
|
|
|
340.8
|
|
|
8.9
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
353.8
|
|
|
—
|
|
|
353.8
|
|
|
—
|
|
||||
Total fixed maturities
|
1,830.1
|
|
|
—
|
|
|
1,821.2
|
|
|
8.9
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
194.4
|
|
|
194.4
|
|
|
—
|
|
|
—
|
|
||||
Small-cap securities
|
70.9
|
|
|
70.9
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
265.3
|
|
|
265.3
|
|
|
—
|
|
|
—
|
|
||||
Other invested assets
|
80.9
|
|
|
6.7
|
|
|
74.2
|
|
|
—
|
|
||||
Total available-for-sale investments
|
$
|
2,176.3
|
|
|
$
|
272.0
|
|
|
$
|
1,895.4
|
|
|
$
|
8.9
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
Fixed
maturities
|
||
Balance at January 1, 2014
|
$
|
8.9
|
|
Total realized gains (losses)—included in earnings
|
—
|
|
|
Total unrealized gains (losses)—included in other comprehensive income
|
0.2
|
|
|
Purchases
|
0.3
|
|
|
Sales
|
—
|
|
|
Transfers into Level 3
|
—
|
|
|
Transfers out of Level 3
|
—
|
|
|
Balance at December 31, 2014
|
$
|
9.4
|
|
($ 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
|
0.2
|
|
|
Purchases
|
0.2
|
|
|
Sales
|
—
|
|
|
Transfers into Level 3
|
—
|
|
|
Transfers out of Level 3
|
—
|
|
|
Balance at December 31, 2013
|
$
|
8.9
|
|
|
|
|
($ millions, except interest rates)
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||
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
|
|
|
$
|
86.4
|
|
|
5.03
|
%
|
|
$
|
85.3
|
|
|
$
|
85.7
|
|
|
5.03
|
%
|
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest
|
15.5
|
|
|
15.5
|
|
|
4.44
|
%
|
|
15.5
|
|
|
15.5
|
|
|
4.44
|
%
|
||||
Total notes payable
|
$
|
100.8
|
|
|
$
|
101.9
|
|
|
|
|
$
|
100.8
|
|
|
$
|
101.2
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Losses and loss expenses payable, at beginning of year
|
$
|
959.9
|
|
|
$
|
942.2
|
|
|
$
|
907.1
|
|
Less: reinsurance recoverable on losses and loss expenses payable
|
9.1
|
|
|
13.5
|
|
|
25.5
|
|
|||
Net balance at beginning of year
|
950.8
|
|
|
928.7
|
|
|
881.6
|
|
|||
Incurred related to:
|
|
|
|
|
|
||||||
Current year
|
726.2
|
|
|
741.0
|
|
|
795.2
|
|
|||
Prior years
|
45.1
|
|
|
(21.2
|
)
|
|
(16.9
|
)
|
|||
Total incurred
|
771.3
|
|
|
719.8
|
|
|
778.3
|
|
|||
Paid related to:
|
|
|
|
|
|
||||||
Current year
|
373.2
|
|
|
355.0
|
|
|
397.2
|
|
|||
Prior years
|
375.3
|
|
|
342.7
|
|
|
334.0
|
|
|||
Total paid
|
748.5
|
|
|
697.7
|
|
|
731.2
|
|
|||
Net balance at end of year
|
973.6
|
|
|
950.8
|
|
|
928.7
|
|
|||
Plus: reinsurance recoverable on losses and loss expenses payable
|
9.6
|
|
|
9.1
|
|
|
13.5
|
|
|||
Losses and loss expenses payable, at end of year (affiliates $494.3, $438.0 and $435.1, respectively)
|
$
|
983.2
|
|
|
$
|
959.9
|
|
|
$
|
942.2
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Losses and loss expenses payable:
|
|
|
|
||||
Direct
|
$
|
484.4
|
|
|
$
|
516.9
|
|
Assumed
|
4.5
|
|
|
5.0
|
|
||
Ceded
|
(9.6
|
)
|
|
(9.1
|
)
|
||
Net losses and loss expenses payable
|
$
|
479.3
|
|
|
$
|
512.8
|
|
Unearned premiums:
|
|
|
|
||||
Direct
|
$
|
409.7
|
|
|
$
|
411.6
|
|
Assumed
|
1.0
|
|
|
1.0
|
|
||
Ceded
|
(6.1
|
)
|
|
(4.7
|
)
|
||
Net unearned premiums
|
$
|
404.6
|
|
|
$
|
407.9
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Written premiums:
|
|
|
|
|
|
||||||
Direct
|
$
|
880.6
|
|
|
$
|
886.7
|
|
|
$
|
860.1
|
|
Assumed
|
4.4
|
|
|
3.9
|
|
|
4.0
|
|
|||
Ceded
|
(26.8
|
)
|
|
(24.3
|
)
|
|
(24.3
|
)
|
|||
Net written premiums
|
$
|
858.2
|
|
|
$
|
866.3
|
|
|
$
|
839.8
|
|
Earned premiums:
|
|
|
|
|
|
||||||
Direct
|
$
|
882.6
|
|
|
$
|
874.7
|
|
|
$
|
833.3
|
|
Assumed
|
4.4
|
|
|
3.8
|
|
|
4.1
|
|
|||
Ceded
|
(25.3
|
)
|
|
(23.5
|
)
|
|
(28.2
|
)
|
|||
Net earned premiums
|
$
|
861.7
|
|
|
$
|
855.0
|
|
|
$
|
809.2
|
|
Losses and loss expenses incurred:
|
|
|
|
|
|
||||||
Direct
|
$
|
525.6
|
|
|
$
|
559.1
|
|
|
$
|
577.4
|
|
Assumed
|
2.9
|
|
|
3.0
|
|
|
3.6
|
|
|||
Ceded
|
(8.0
|
)
|
|
(4.8
|
)
|
|
(6.4
|
)
|
|||
Net losses and loss expenses incurred
|
$
|
520.5
|
|
|
$
|
557.3
|
|
|
$
|
574.6
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Deferred policy acquisition costs:
|
|
|
|
||||
Ceded
|
$
|
(79.7
|
)
|
|
$
|
(77.6
|
)
|
Assumed
|
126.5
|
|
|
96.8
|
|
||
Net assumed
|
$
|
46.8
|
|
|
$
|
19.2
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Losses and loss expenses payable:
|
|
|
|
||||
Ceded
|
$
|
(479.3
|
)
|
|
$
|
(512.8
|
)
|
Assumed
|
973.6
|
|
|
950.8
|
|
||
Net assumed
|
$
|
494.3
|
|
|
$
|
438.0
|
|
Unearned premiums:
|
|
|
|
||||
Ceded
|
$
|
(404.6
|
)
|
|
$
|
(407.9
|
)
|
Assumed
|
606.3
|
|
|
486.3
|
|
||
Net assumed
|
$
|
201.7
|
|
|
$
|
78.4
|
|
Pension and postretirement benefits:
|
|
|
|
||||
Ceded
|
$
|
(180.5
|
)
|
|
$
|
(106.5
|
)
|
Assumed
|
117.3
|
|
|
69.2
|
|
||
Net ceded
|
$
|
(63.2
|
)
|
|
$
|
(37.3
|
)
|
Other liabilities:
|
|
|
|
||||
Ceded
|
$
|
(70.7
|
)
|
|
$
|
(47.2
|
)
|
Assumed
|
65.6
|
|
|
67.2
|
|
||
Net ceded
|
$
|
(5.1
|
)
|
|
$
|
20.0
|
|
Stockholders' Equity
|
|
|
|
||||
Accumulated other comprehensive income:
|
|
|
|
||||
Ceded
|
$
|
(186.0
|
)
|
|
$
|
(117.1
|
)
|
Assumed
|
120.9
|
|
|
76.1
|
|
||
Net ceded
|
$
|
(65.1
|
)
|
|
$
|
(41.0
|
)
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
|||||||
Written premiums:
|
|
|
|
|
|
|||||||
Ceded
|
$
|
(858.2
|
)
|
|
$
|
(866.3
|
)
|
|
$
|
(839.9
|
)
|
|
Assumed
|
1,194.2
|
|
|
1,062.1
|
|
|
1,055.3
|
|
||||
Net assumed
|
$
|
336.0
|
|
|
$
|
195.8
|
|
|
$
|
215.4
|
|
|
Earned premiums:
|
|
|
|
|
|
|||||||
Ceded
|
$
|
(861.7
|
)
|
|
$
|
(855.0
|
)
|
|
$
|
(809.2
|
)
|
|
Assumed
|
1,074.1
|
|
|
1,055.0
|
|
|
1,042.1
|
|
||||
Net assumed
|
$
|
212.4
|
|
|
$
|
200.0
|
|
|
$
|
232.9
|
|
|
Losses and loss expenses incurred:
|
|
|
|
|
|
|||||||
Ceded
|
$
|
(523.6
|
)
|
|
$
|
(560.2
|
)
|
|
$
|
(575.7
|
)
|
|
Assumed
|
774.4
|
|
|
722.7
|
|
|
779.4
|
|
||||
Net assumed
|
$
|
250.8
|
|
|
$
|
162.5
|
|
|
$
|
203.7
|
|
|
Acquisition and operating expenses:
|
|
|
|
|
|
|||||||
Ceded
|
(215.4
|
)
|
|
(192.6
|
)
|
|
(161.8
|
)
|
||||
Assumed
|
372.3
|
|
|
365.3
|
|
|
352.6
|
|
||||
Net assumed
|
$
|
156.9
|
|
|
$
|
172.7
|
|
|
$
|
190.8
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
Amount at statutory rate
|
$
|
9.4
|
|
|
35.0
|
%
|
|
$
|
21.5
|
|
|
35.0
|
%
|
|
$
|
3.7
|
|
|
35.0
|
%
|
Tax-exempt interest and dividends received deduction
|
(8.5
|
)
|
|
(32.0
|
)
|
|
(9.4
|
)
|
|
(15.0
|
)
|
|
(9.1
|
)
|
|
(85.0
|
)
|
|||
Other, net
|
1.1
|
|
|
4.0
|
|
|
0.2
|
|
|
—
|
|
|
0.5
|
|
|
4.0
|
|
|||
Valuation allowance
|
(82.6
|
)
|
|
(308.0
|
)
|
|
(11.8
|
)
|
|
(19.0
|
)
|
|
4.8
|
|
|
45.0
|
|
|||
Federal income tax (benefit) expense and effective rate
|
$
|
(80.6
|
)
|
|
(301.0
|
)%
|
|
$
|
0.5
|
|
|
1.0
|
%
|
|
$
|
(0.1
|
)
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Deferred tax assets:
|
|
|
|
||||
Unearned premiums not currently deductible
|
$
|
42.2
|
|
|
$
|
33.8
|
|
Losses and loss expenses payable discounting
|
21.0
|
|
|
21.6
|
|
||
Postretirement and pension benefits
|
41.1
|
|
|
24.9
|
|
||
Realized loss on other-than-temporary impairment
|
8.4
|
|
|
7.5
|
|
||
Other liabilities
|
22.2
|
|
|
17.3
|
|
||
Net operating loss carryforward
|
58.0
|
|
|
56.5
|
|
||
Tax credit carryforward
|
1.9
|
|
|
1.7
|
|
||
Other
|
4.7
|
|
|
9.2
|
|
||
Total deferred tax assets
|
199.5
|
|
|
172.5
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Deferral of policy acquisition costs
|
44.3
|
|
|
33.9
|
|
||
Net unrealized holding gains on investments
|
57.8
|
|
|
44.1
|
|
||
Total deferred tax liabilities
|
102.1
|
|
|
78.0
|
|
||
Total net deferred tax assets before valuation allowance
|
97.4
|
|
|
94.5
|
|
||
Less valuation allowance
|
—
|
|
|
82.6
|
|
||
Net deferred federal income taxes
|
$
|
97.4
|
|
|
$
|
11.9
|
|
|
|
|
|
|
($ millions)
|
Pension
|
|
Postretirement
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Change in benefit obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of year
|
$
|
230.5
|
|
|
$
|
246.1
|
|
|
$
|
22.3
|
|
|
$
|
25.1
|
|
Service cost
|
4.6
|
|
|
6.1
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
10.8
|
|
|
9.6
|
|
|
1.1
|
|
|
1.0
|
|
||||
Actuarial loss (gain)
|
57.3
|
|
|
(19.6
|
)
|
|
1.7
|
|
|
(2.6
|
)
|
||||
Benefits paid
|
(10.7
|
)
|
|
(11.7
|
)
|
|
(1.2
|
)
|
|
(1.2
|
)
|
||||
The Company’s portion of benefit obligation at end of year
|
$
|
292.5
|
|
|
$
|
230.5
|
|
|
$
|
23.9
|
|
|
$
|
22.3
|
|
Change in plan assets available for plan benefits:
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets available for plan benefits at beginning of year
|
$
|
185.9
|
|
|
$
|
162.2
|
|
|
$
|
1.3
|
|
|
$
|
1.8
|
|
Employer contribution
|
13.0
|
|
|
13.0
|
|
|
—
|
|
|
—
|
|
||||
Actual return on plan assets
|
16.9
|
|
|
22.4
|
|
|
—
|
|
|
0.3
|
|
||||
Benefits paid
|
(10.7
|
)
|
|
(11.7
|
)
|
|
(1.0
|
)
|
|
(0.8
|
)
|
||||
The Company’s portion of fair value of plan assets at end of year
|
$
|
205.1
|
|
|
$
|
185.9
|
|
|
$
|
0.3
|
|
|
$
|
1.3
|
|
Supplemental executive retirement plan
|
(6.3
|
)
|
|
(6.0
|
)
|
|
—
|
|
|
—
|
|
||||
Funded status at end of year
|
$
|
(93.7
|
)
|
|
$
|
(50.6
|
)
|
|
$
|
(23.6
|
)
|
|
$
|
(21.0
|
)
|
Accumulated benefit obligation end of year
|
$
|
260.1
|
|
|
$
|
211.2
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Prior service benefit
|
$
|
(64.9
|
)
|
|
$
|
(70.3
|
)
|
Net actuarial loss
|
141.9
|
|
|
94.3
|
|
||
Total
|
$
|
77.0
|
|
|
$
|
24.0
|
|
|
|
|
|
($ millions)
|
2015
|
||
Prior service benefit
|
$
|
(5.4
|
)
|
Net actuarial loss
|
11.5
|
|
|
Total
|
$
|
6.1
|
|
|
|
($ millions)
|
Pension
|
|
Postretirement
|
||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Components of net periodic cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
5.2
|
|
|
$
|
6.1
|
|
|
$
|
7.8
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
Interest cost
|
11.1
|
|
|
9.6
|
|
|
9.9
|
|
|
1.1
|
|
|
1.2
|
|
|
1.1
|
|
||||||
Expected return on plan assets
|
(12.6
|
)
|
|
(12.2
|
)
|
|
(11.7
|
)
|
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
||||||
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Prior service cost (benefit)
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(5.5
|
)
|
|
(5.5
|
)
|
|
(5.5
|
)
|
||||||
Net actuarial loss
|
6.3
|
|
|
8.1
|
|
|
6.7
|
|
|
0.6
|
|
|
1.0
|
|
|
1.1
|
|
||||||
Net periodic cost (benefit)
|
$
|
10.0
|
|
|
$
|
11.6
|
|
|
$
|
13.0
|
|
|
$
|
(3.8
|
)
|
|
$
|
(3.1
|
)
|
|
$
|
(3.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
Pension
|
|
Postretirement
|
||||
2015
|
$
|
9.6
|
|
|
$
|
1.7
|
|
2016
|
10.0
|
|
|
1.7
|
|
||
2017
|
10.5
|
|
|
1.7
|
|
||
2018
|
11.2
|
|
|
1.6
|
|
||
2019
|
11.8
|
|
|
1.6
|
|
||
2020-2024
|
72.0
|
|
|
7.3
|
|
|
|
Pension
|
|
Postretirement
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Benefit obligations weighted-average assumptions:
|
|
|
|
|
|
|
|
||||
Discount rate
|
3.85
|
%
|
|
4.85
|
%
|
|
3.85
|
%
|
|
4.85
|
%
|
Rates of increase in compensation levels
|
3.50
|
|
|
3.50
|
|
|
—
|
|
|
—
|
|
|
Pension
|
|
Postretirement
|
|
||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
|
||||||||
Weighted-average assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Discount rate
|
4.85
|
%
|
|
4.05
|
%
|
|
4.40
|
%
|
|
4.85
|
%
|
|
4.05
|
%
|
|
4.40
|
%
|
|
||
Expected long-term rate of return on assets
|
7.00
|
|
|
7.50
|
|
|
7.50
|
|
|
—
|
|
|
7.50
|
|
|
7.50
|
|
|
||
Rates of increase in compensation levels
|
3.50
|
|
|
4.00
|
|
|
4.00
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Postretirement
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Assumed health care cost trend rates:
|
|
|
|
|
|
|||
Health care cost trend rate assumed for the next year
|
6.00
|
%
|
|
10.00
|
%
|
|
10.00
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
3.80
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2075
|
|
|
2018
|
|
|
2017
|
|
($ millions)
|
Postretirement
|
||||||
|
Increase
|
|
(Decrease)
|
||||
One percentage point change:
|
|
|
|
||||
Effect on total service and interest cost
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Effect on accumulated postretirement benefit obligation
|
3.8
|
|
|
3.3
|
|
|
($ 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, 2014
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
56.4
|
|
|
$
|
—
|
|
|
$
|
56.4
|
|
|
$
|
—
|
|
Corporate securities
|
39.7
|
|
|
—
|
|
|
39.7
|
|
|
—
|
|
||||
U.S. government agencies mortgage-backed securities
|
9.4
|
|
|
—
|
|
|
9.4
|
|
|
—
|
|
||||
Total fixed maturities
|
105.5
|
|
|
—
|
|
|
105.5
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
53.7
|
|
|
53.7
|
|
|
—
|
|
|
—
|
|
||||
Small-cap securities
|
21.8
|
|
|
21.8
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
75.5
|
|
|
75.5
|
|
|
—
|
|
|
—
|
|
||||
International instruments
|
18.7
|
|
|
—
|
|
|
18.7
|
|
|
—
|
|
||||
Total pension plan investments
|
$
|
199.7
|
|
|
$
|
75.5
|
|
|
$
|
124.2
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
($ 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, 2013
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
30.0
|
|
|
$
|
—
|
|
|
$
|
30.0
|
|
|
$
|
—
|
|
Corporate securities
|
24.6
|
|
|
—
|
|
|
24.6
|
|
|
—
|
|
||||
U.S. government agencies mortgage-backed securities
|
11.3
|
|
|
—
|
|
|
11.3
|
|
|
—
|
|
||||
Total fixed maturities
|
65.9
|
|
|
—
|
|
|
65.9
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
58.0
|
|
|
58.0
|
|
|
—
|
|
|
—
|
|
||||
Small-cap securities
|
26.3
|
|
|
26.3
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
84.3
|
|
|
84.3
|
|
|
—
|
|
|
—
|
|
||||
International instruments
|
25.4
|
|
|
—
|
|
|
25.4
|
|
|
—
|
|
||||
Total pension plan investments
|
$
|
175.6
|
|
|
$
|
84.3
|
|
|
$
|
91.3
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
($ 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, 2014
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
Total fixed maturities
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Short-term money market funds
|
0.2
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
||||
Total postretirement plan investments
|
$
|
0.3
|
|
|
$
|
0.2
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Quoted prices
in active
markets for
identical
assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
December 31, 2013
|
|
|
|
||||||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
Total fixed maturities
|
0.2
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
||||
Equity securities:
|
|
|
|
|
|
|
|
||||||||
Large-cap securities
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
||||
Total equity securities
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
||||
Total postretirement plan investments
|
$
|
1.0
|
|
|
$
|
0.8
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
($ millions)
|
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, 2014
|
$
|
84.6
|
|
|
$
|
—
|
|
|
$
|
(3.8
|
)
|
|
$
|
80.8
|
|
|
Other comprehensive income before reclassifications
|
38.9
|
|
|
—
|
|
|
(54.4
|
)
|
|
(15.5
|
)
|
|||||
Amounts reclassified from AOCI
(a)
|
(13.5
|
)
|
|
—
|
|
|
19.9
|
|
|
6.4
|
|
|||||
Net current period other comprehensive income
|
25.4
|
|
|
—
|
|
|
(34.5
|
)
|
|
(9.1
|
)
|
|||||
Ending balance at December 31, 2014
|
$
|
110.0
|
|
|
$
|
—
|
|
|
$
|
(38.3
|
)
|
|
$
|
71.7
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1, 2013
|
$
|
124.0
|
|
|
$
|
0.1
|
|
|
$
|
(39.9
|
)
|
|
$
|
84.2
|
|
|
Other comprehensive income before reclassifications
|
(16.1
|
)
|
|
—
|
|
|
32.5
|
|
|
16.4
|
|
|||||
Amounts reclassified from AOCI
(a)
|
(23.3
|
)
|
|
(0.1
|
)
|
|
3.6
|
|
|
(19.8
|
)
|
|||||
Net current period other comprehensive income
|
(39.4
|
)
|
|
(0.1
|
)
|
|
36.1
|
|
|
(3.4
|
)
|
|||||
Ending balance at December 31, 2013
|
$
|
84.6
|
|
|
$
|
—
|
|
|
$
|
(3.8
|
)
|
|
$
|
80.8
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance at January 1, 2012
|
$
|
98.7
|
|
|
$
|
0.2
|
|
|
$
|
(35.1
|
)
|
|
$
|
63.8
|
|
|
Other comprehensive income before reclassifications
|
54.1
|
|
|
—
|
|
|
(7.4
|
)
|
|
46.7
|
|
|||||
Amounts reclassified from AOCI
(a)
|
(28.8
|
)
|
|
(0.1
|
)
|
|
2.6
|
|
|
(26.3
|
)
|
|||||
Net current period other comprehensive income
|
25.3
|
|
|
(0.1
|
)
|
|
(4.8
|
)
|
|
20.4
|
|
|||||
Ending balance at December 31, 2012
|
$
|
124.0
|
|
|
$
|
0.1
|
|
|
$
|
(39.9
|
)
|
|
$
|
84.2
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(a)
|
See separate table below for details about these reclassifications
|
|
($ millions)
|
|
|
|
|
|
|
|
|
|||||||
Details about Accumulated Other
|
|
December 31
|
|
Affected line item in the Condensed
|
|||||||||||
Comprehensive Income Components
|
|
2014
|
|
2013
|
|
2012
|
|
Consolidated Statements of Income
|
|||||||
Unrealized gains on available for sale securities
|
|
$
|
20.7
|
|
|
$
|
23.2
|
|
|
$
|
28.8
|
|
|
Realized gain on sale of securities
|
|
|
|
|
20.7
|
|
|
23.2
|
|
|
28.8
|
|
|
Total before tax
|
|||
|
|
|
(7.2
|
)
|
|
0.1
|
|
|
—
|
|
|
Tax (expense) benefit
|
|||
|
|
|
13.5
|
|
|
23.3
|
|
|
28.8
|
|
|
Net of tax
|
|||
Amortization of gain on derivative used in cash flow hedge
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
Realized gain 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
|
|
5.5
|
|
|
5.5
|
|
|
5.2
|
|
|
(a)
|
||||
Net loss
|
|
(6.9
|
)
|
|
(9.1
|
)
|
|
(7.8
|
)
|
|
(a)
|
||||
|
|
|
(1.4
|
)
|
|
(3.6
|
)
|
|
(2.6
|
)
|
|
Total before tax
|
|||
|
|
|
(18.5
|
)
|
|
—
|
|
|
—
|
|
|
Tax expense
|
|||
|
|
|
(19.9
|
)
|
|
(3.6
|
)
|
|
(2.6
|
)
|
|
Net of tax
|
|||
Total reclassifications for the period
|
|
$
|
(6.4
|
)
|
|
$
|
19.8
|
|
|
$
|
26.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(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)
|
2014
|
|
2013
|
||||
Statutory capital and surplus of insurance subsidiaries
|
$
|
778.4
|
|
|
$
|
753.2
|
|
Net liabilities of non-insurance parent and affiliates
|
(80.8
|
)
|
|
(82.4
|
)
|
||
|
697.6
|
|
|
670.8
|
|
||
Increases (decreases):
|
|
|
|
||||
Deferred acquisition costs
|
126.5
|
|
|
96.8
|
|
||
Postretirement and pension benefits
|
27.2
|
|
|
6.3
|
|
||
Deferred federal income taxes
|
(49.7
|
)
|
|
(15.8
|
)
|
||
Fixed maturities, at fair value
|
60.6
|
|
|
26.1
|
|
||
Other, net
|
10.7
|
|
|
0.8
|
|
||
Stockholders’ equity per accompanying consolidated financial statements
|
$
|
872.9
|
|
|
$
|
785.0
|
|
|
|
|
|
($ millions)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Statutory net (loss) income of insurance subsidiaries
|
$
|
(17.5
|
)
|
|
$
|
51.1
|
|
|
$
|
5.5
|
|
Net (loss) income of non-insurance parent and affiliates
|
(5.3
|
)
|
|
(5.1
|
)
|
|
0.2
|
|
|||
|
(22.8
|
)
|
|
46.0
|
|
|
5.7
|
|
|||
Increases (decreases):
|
|
|
|
|
|
||||||
Deferred acquisition costs
|
29.7
|
|
|
5.1
|
|
|
—
|
|
|||
Postretirement and pension benefits
|
10.6
|
|
|
10.3
|
|
|
5.3
|
|
|||
Deferred federal income taxes
|
79.3
|
|
|
(1.0
|
)
|
|
(3.3
|
)
|
|||
Share-based compensation expense
|
(0.5
|
)
|
|
(1.3
|
)
|
|
(2.7
|
)
|
|||
Other, net
|
11.1
|
|
|
1.7
|
|
|
5.7
|
|
|||
Net income per accompanying consolidated financial statements
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||||||
|
Shares
|
|
Weighted
Average
Grant
Date Fair
Value
|
|
Shares
|
|
Weighted
Average
Grant
Date Fair
Value
|
|
Shares
|
|
Weighted
Average
Grant
Date Fair
Value
|
||||||||||
Outstanding, beginning of year
|
38,233
|
|
|
$
|
15.06
|
|
|
55,413
|
|
|
$
|
16.21
|
|
|
33,887
|
|
|
$
|
17.92
|
|
|
Granted
|
56,178
|
|
|
21.23
|
|
|
—
|
|
|
—
|
|
|
21,526
|
|
|
13.53
|
|
||||
Vested
|
(16,892
|
)
|
|
17.08
|
|
|
(17,180
|
)
|
|
18.78
|
|
|
—
|
|
|
—
|
|
||||
Canceled
|
(1,047
|
)
|
|
21.23
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Outstanding, end of year
|
76,472
|
|
|
$
|
19.06
|
|
|
38,233
|
|
|
$
|
15.06
|
|
|
55,413
|
|
|
$
|
16.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Fair value per share
|
$
|
7.28
|
|
|
$
|
5.15
|
|
|
$
|
3.46
|
|
Expected dividend yield
|
1.86
|
%
|
|
2.40
|
%
|
|
4.41
|
%
|
|||
Risk free interest rate
|
1.65
|
%
|
|
1.26
|
%
|
|
1.10
|
%
|
|||
Expected volatility factor
|
39.23
|
%
|
|
37.59
|
%
|
|
41.50
|
%
|
|||
Expected life in years
|
5.7
|
|
|
6.3
|
|
|
5.4
|
|
(millions, except per share amounts)
|
2014
|
|
2013
|
|
2012
|
|||||||||||||||
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|
Options
|
|
Weighted-
Average
Exercise
Price
|
|||||||||
Outstanding, beginning of year
|
3.9
|
|
|
$
|
22.01
|
|
|
3.9
|
|
|
$
|
22.25
|
|
|
3.8
|
|
|
$
|
22.79
|
|
Granted
|
0.3
|
|
|
21.20
|
|
|
0.5
|
|
|
16.82
|
|
|
0.4
|
|
|
13.54
|
|
|||
Exercised
|
(0.1
|
)
|
|
16.43
|
|
|
(0.2
|
)
|
|
16.82
|
|
|
—
|
|
|
14.49
|
|
|||
Canceled
|
(0.4
|
)
|
|
30.21
|
|
|
(0.3
|
)
|
|
19.52
|
|
|
(0.3
|
)
|
|
17.95
|
|
|||
Outstanding, end of year
|
3.7
|
|
|
$
|
21.29
|
|
|
3.9
|
|
|
$
|
22.01
|
|
|
3.9
|
|
|
$
|
22.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Options in millions)
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
|
Number
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Weighted-
Average
Exercise
Price
|
|
Number
|
|
Weighted-
Average
Exercise
Price
|
||||||
Range of Exercise Prices:
|
|
|
|
|
|
|
|
|
|
||||||
$10.01 – $20.00
|
2.1
|
|
|
5.8
|
|
$
|
16.47
|
|
|
1.5
|
|
|
$
|
16.65
|
|
$20.01 – $30.00
|
1.3
|
|
|
3.1
|
|
25.84
|
|
|
1.0
|
|
|
27.32
|
|
||
Greater than $30.00
|
0.3
|
|
|
1.4
|
|
33.45
|
|
|
0.3
|
|
|
33.45
|
|
||
|
3.7
|
|
|
4.5
|
|
$
|
21.29
|
|
|
2.8
|
|
|
$
|
22.30
|
|
|
|
|
|
|
|
|
|
|
|
(millions, except per share amounts)
|
2014
|
|
2013
|
|
2012
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net earnings for basic net earnings per common share
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Adjusted net earnings for dilutive net earnings per common share
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares for basic net earnings per common share
|
40.8
|
|
|
40.6
|
|
|
40.4
|
|
|||
Effect of dilutive share-based awards
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|||
Adjusted weighted average shares for diluted net earnings per common share
|
41.2
|
|
|
40.7
|
|
|
40.5
|
|
|||
|
|
|
|
|
|
||||||
Basic net earnings per common share
|
$
|
2.63
|
|
|
$
|
1.50
|
|
|
$
|
0.26
|
|
Diluted net earnings per common share
|
$
|
2.60
|
|
|
$
|
1.49
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
(millions)
|
2014
|
|
2013
|
|
2012
|
|||
Total number of antidilutive options and awards
|
1.8
|
|
|
2.6
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues from external sources:
|
|
|
|
|
|
||||||
Insurance segments
|
|
|
|
|
|
||||||
Personal insurance
|
$
|
451.4
|
|
|
$
|
464.0
|
|
|
$
|
469.8
|
|
Business insurance
|
381.8
|
|
|
364.2
|
|
|
327.2
|
|
|||
Specialty insurance
|
240.9
|
|
|
226.8
|
|
|
245.1
|
|
|||
Total insurance segments
|
1,074.1
|
|
|
1,055.0
|
|
|
1,042.1
|
|
|||
Investment operations segment
|
|
|
|
|
|
||||||
Net investment income
|
74.7
|
|
|
72.8
|
|
|
75.4
|
|
|||
Net realized capital gains
|
20.7
|
|
|
23.2
|
|
|
28.8
|
|
|||
Total investment operations segment
|
95.4
|
|
|
96.0
|
|
|
104.2
|
|
|||
Total revenue from reportable segments
|
1,169.5
|
|
|
1,151.0
|
|
|
1,146.3
|
|
|||
All other
|
3.2
|
|
|
2.0
|
|
|
3.8
|
|
|||
Total revenues from external sources
|
1,172.7
|
|
|
1,153.0
|
|
|
1,150.1
|
|
|||
Intersegment revenues
|
5.1
|
|
|
5.1
|
|
|
9.5
|
|
|||
Total revenues
|
1,177.8
|
|
|
1,158.1
|
|
|
1,159.6
|
|
|||
Reconciling items:
|
|
|
|
|
|
||||||
Eliminate intersegment revenues
|
(5.1
|
)
|
|
(5.1
|
)
|
|
(9.5
|
)
|
|||
Total consolidated revenue
|
$
|
1,172.7
|
|
|
$
|
1,153.0
|
|
|
$
|
1,150.1
|
|
Segment loss before federal income tax:
|
|
|
|
|
|
||||||
Insurance segments:
|
|
|
|
|
|
||||||
Personal insurance SAP underwriting loss
|
$
|
(11.7
|
)
|
|
$
|
(12.6
|
)
|
|
$
|
(1.6
|
)
|
Business insurance SAP underwriting loss
|
(8.5
|
)
|
|
(10.2
|
)
|
|
(42.3
|
)
|
|||
Specialty insurance SAP underwriting loss
|
(85.6
|
)
|
|
(11.2
|
)
|
|
(48.1
|
)
|
|||
Total insurance segments
|
(105.8
|
)
|
|
(34.0
|
)
|
|
(92.0
|
)
|
|||
Investment operations segment:
|
|
|
|
|
|
||||||
Net investment income
|
74.7
|
|
|
72.8
|
|
|
75.4
|
|
|||
Net realized capital gains
|
20.7
|
|
|
23.2
|
|
|
28.8
|
|
|||
Total investment operations segment
|
95.4
|
|
|
96.0
|
|
|
104.2
|
|
|||
All other segments income
|
—
|
|
|
0.9
|
|
|
2.0
|
|
|||
Reconciling items:
|
|
|
|
|
|
||||||
GAAP adjustments
|
45.8
|
|
|
11.8
|
|
|
7.2
|
|
|||
Interest expense on corporate debt
|
(5.4
|
)
|
|
(8.5
|
)
|
|
(7.0
|
)
|
|||
Corporate expenses
|
(3.2
|
)
|
|
(4.9
|
)
|
|
(3.8
|
)
|
|||
Total reconciling items
|
$
|
37.2
|
|
|
$
|
(1.6
|
)
|
|
$
|
(3.6
|
)
|
Total consolidated income before federal income taxes
|
$
|
26.8
|
|
|
$
|
61.3
|
|
|
$
|
10.6
|
|
|
|
|
|
|
|
($ millions)
|
2014
|
|
2013
|
||||
Segment assets:
|
|
|
|
||||
Investment operations segment
|
$
|
2,444.2
|
|
|
$
|
2,331.6
|
|
Total segment assets
|
2,444.2
|
|
|
2,331.6
|
|
||
Reconciling items:
|
|
|
|
||||
Corporate assets
|
322.7
|
|
|
164.8
|
|
||
Total consolidated assets
|
$
|
2,766.9
|
|
|
$
|
2,496.4
|
|
|
|
|
|
|
($ millions, except per share amounts)
|
2014
|
||||||||||||||
|
For three months ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenues
|
$
|
291.3
|
|
|
$
|
294.4
|
|
|
$
|
291.3
|
|
|
$
|
295.7
|
|
Income (loss) before federal income taxes
|
27.7
|
|
|
3.1
|
|
|
13.1
|
|
|
(17.1
|
)
|
||||
Net income
|
27.1
|
|
|
3.0
|
|
|
11.9
|
|
|
65.4
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.67
|
|
|
$
|
0.07
|
|
|
$
|
0.29
|
|
|
$
|
1.60
|
|
Diluted
|
$
|
0.66
|
|
|
$
|
0.07
|
|
|
$
|
0.28
|
|
|
$
|
1.58
|
|
|
|
|
|
|
|
|
|
|
2013
|
||||||||||||||
|
For three months ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenues
|
$
|
285.3
|
|
|
$
|
285.3
|
|
|
$
|
292.7
|
|
|
$
|
289.7
|
|
Income before federal income taxes
|
20.0
|
|
|
6.3
|
|
|
18.7
|
|
|
16.3
|
|
||||
Net income
|
19.7
|
|
|
6.2
|
|
|
18.5
|
|
|
16.4
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.49
|
|
|
$
|
0.15
|
|
|
$
|
0.46
|
|
|
$
|
0.40
|
|
Diluted
|
$
|
0.49
|
|
|
$
|
0.15
|
|
|
$
|
0.45
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
|
2.
|
Our management has used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) 2013 framework to evaluate the effectiveness of our internal control over financial reporting. Our management believes that the COSO 2013 framework is a suitable framework for its evaluation of our internal control over financial reporting because it is free from bias, permits reasonably qualitative and quantitative measurements of our internal controls, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal controls are not omitted and is relevant to an evaluation of internal control over financial reporting.
|
3.
|
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting.
|
4.
|
Our management has assessed the effectiveness of our internal control over financial reporting as of
December 31, 2014
, and has concluded that such internal control over financial reporting was effective.
|
5.
|
Ernst & Young LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K, has issued their attestation on the Company’s internal control over financial reporting, which is included herein.
|
Schedule
Number
|
|
Schedule
|
|
|
|
I.
|
|
Summary of Investments—Other Than Investments in Related Parties
|
|
|
|
II.
|
|
Condensed Financial Information of Registrant
|
|
|
|
III.
|
|
Supplementary Insurance Information
|
|
|
|
IV.
|
|
Reinsurance
|
|
|
|
V.
|
|
Valuation and Qualifying Accounts
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
3.01
|
|
State Auto Financial Corporation’s Amended and Restated Articles of Incorporation
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 3.01 therein)
|
|
|
|
|
|
3.02
|
|
State Auto Financial Corporation’s Amendment to the Amended and Restated Articles of Incorporation
|
|
1933 Act Registration Statement No. 33-89400 on Form S-8 (see Exhibit 4(b) therein)
|
|
|
|
|
|
3.03
|
|
State Auto Financial Corporation Certificate of Amendment to the Amended and Restated Articles of Incorporation as of June 2, 1998
|
|
Form 10-K Annual Report for the year ended December 31, 1998 (see Exhibit 3(A)(3) therein)
|
|
|
|
|
|
3.04
|
|
State Auto Financial Corporation’s Amended and Restated Code of Regulations
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 3.04 therein)
|
|
|
|
|
|
3.05
|
|
First Amendment to State Auto Financial Corporation’s Amended and Restated Code of Regulations as of May 7, 2010
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2010 (see Exhibit 3.05 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.01*
|
|
2000 Directors Stock Option Plan of State Auto Financial Corporation
|
|
Definitive Proxy Statement on Form DEF 14A, File No. 000-19289, for Annual Meeting of Shareholders held on May 26, 2000 (see Appendix B therein)
|
|
|
|
|
|
10.02*
|
|
First Amendment to 2000 Directors Stock Option Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2001 (see Exhibit 10(HH) therein)
|
|
|
|
|
|
10.03*
|
|
Second Amendment to 2000 Directors Stock Option Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2001 (see Exhibit 10(KK) therein)
|
|
|
|
|
|
10.04*
|
|
Third Amendment to 2000 Directors Stock Option Plan of State Auto Financial Corporation
|
|
Form 10-K Annual Report for the year ended December 31, 2001 (see Exhibit 10(EE) therein)
|
|
|
|
|
|
10.05*
|
|
Fourth Amendment to 2000 Directors Stock Option Plan of State Auto Financial Corporation
|
|
Form 10-K Annual Report for year ended December 31, 2002 (see Exhibit 10(UU) therein)
|
|
|
|
|
|
10.06*
|
|
Fifth Amendment to 2000 Directors Stock Option Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.66 therein)
|
|
|
|
|
|
10.07*
|
|
Sixth Amendment to the 2000 Directors Stock Option Plan (effective March 7, 2008) of State Auto Financial Corporation
|
|
Form 8-K Current Report filed on March 13, 2008 (see Exhibit 10.3 therein)
|
|
|
|
|
|
10.08
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and State Automobile Mutual Insurance Company, effective April 1, 1993
|
|
Form 10-K Annual Report for the year ended December 31, 1992 (see Exhibit 10 (N) therein)
|
|
|
|
|
|
10.09
|
|
First Amendment to the Investment Management Agreement between Stateco Financial Services, Inc. and State Automobile Mutual Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.09 therein)
|
|
|
|
|
|
10.10
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and State Automobile Mutual Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.10 therein)
|
|
|
|
|
|
10.11
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and Meridian Security Insurance Company, effective June 1, 2001
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.17 therein)
|
|
|
|
|
|
10.12
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and Meridian Security Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.12 therein)
|
|
|
|
|
|
10.13
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and State Auto Florida Insurance Company effective April 1, 2002
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.18 therein)
|
|
|
|
|
|
10.14
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and Midwest Security Insurance Company effective January 1, 1997
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.19 therein)
|
|
|
|
|
|
10.15
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and Midwest Security Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.15 therein)
|
|
|
|
|
|
10.16
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and Meridian Citizens Mutual Insurance Company effective June 1, 2001
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.20 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.17
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and Meridian Citizens Mutual Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.17 therein)
|
|
|
|
|
|
10.18
|
|
Investment Management Agreement dated March 29, 2007, between Stateco Financial Services, Inc. and Beacon National Insurance Company, First Preferred Insurance Company, Petrolia Insurance Company and Beacon Lloyds Insurance Company
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2007 (see Exhibit 10.63 therein)
|
|
|
|
|
|
10.19
|
|
Amended and Restated Investment Management Agreement dated as of December 31, 2007, among Stateco Financial Services, Inc. and Patrons Mutual Insurance Company of Connecticut, Patrons Fire Insurance Company of Rhode Island, and Provision State Insurance Company
|
|
Form 10-K Annual Report for the year ended December 31, 2007 (see Exhibit 10.22 therein)
|
|
|
|
|
|
10.20
|
|
Amended and Restated Investment Management Agreement dated as of December 31, 2007, between Stateco Financial Services, Inc. and Litchfield Mutual Fire Insurance Company
|
|
Form 10-K Annual Report for the year ended December 31, 2007 (see Exhibit 10.23 therein)
|
|
|
|
|
|
10.21
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and Plaza Insurance Company effective October 1, 2010
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.26 therein)
|
|
|
|
|
|
10.22
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and Plaza Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.22 therein)
|
|
|
|
|
|
10.23
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and Rockhill Insurance Company effective October 1, 2010
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.27 therein)
|
|
|
|
|
|
10.24
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and Rockhill Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.24 therein)
|
|
|
|
|
|
10.25
|
|
Investment Management Agreement between Stateco Financial Services, Inc. and American Compensation Insurance Company and Bloomington Compensation Insurance Company effective October 1, 2010
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.28) therein)
|
|
|
|
|
|
10.26
|
|
Amended and Restated Exhibit A to the Investment Management Agreement between Stateco Financial Services, Inc. and American Compensation Insurance Company and Bloomington Compensation Insurance Company, effective January 1, 2013
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.26 therein)
|
|
|
|
|
|
10.27
|
|
Cost Sharing Agreement among State Auto Property and Casualty Insurance Company, State Automobile Mutual Insurance Company, and State Auto Florida Insurance Company effective January 1, 2003
|
|
Form 10-K Annual Report for year ended December 31, 2002 (see Exhibit 10(OO) therein)
|
|
|
|
|
|
10.28
|
|
Midwest Security Insurance Company Management Agreement amended and restated as of January 1, 2000 by and among State Automobile Mutual Insurance Company, State Auto Property and Casualty Insurance Company and Midwest Security Insurance Company (nka State Auto Insurance Company of Wisconsin)
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.45 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.29
|
|
Management and Operations Agreement, Amended and Restated as of January 1, 2005 by and among State Automobile Mutual Insurance Company, State Auto Financial Corporation, State Auto Property and Casualty Insurance Company, State Auto National Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Ohio, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Meridian Insurance Group, Inc., Farmers Casualty Insurance Company, Stateco Financial Services, Inc., Strategic Insurance Software, Inc., and 518 Property Management and Leasing, LLC
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2005 (see Exhibit10.56 therein)
|
|
|
|
|
|
10.30
|
|
First Amendment, made as of April 1, 2007, to Management and Operations Agreement Amended and Restated as of January 1, 2005, by and among State Automobile Mutual Insurance Company, State Auto Financial Corporation, State Auto Property and Casualty Insurance Company, State Auto National Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Ohio, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Meridian Insurance Group, Inc., Farmers Casualty Insurance Company, Stateco Financial Services, Inc., Strategic Insurance Software, Inc., 518 Property Management and Leasing, LLC, State Auto Florida Insurance Company, Beacon National Insurance Company, Beacon Lloyds, Inc., Beacon Lloyds Insurance Company, First Preferred Insurance Company, and Petrolia Insurance Company
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2007 (see Exhibit 66.67 therein)
|
|
|
|
|
|
10.31
|
|
Second Amendment dated as of December 31, 2008, to the Management and Operations Agreement, Amended and Restated as of January 1, 2005, among State Auto Financial Corporation, State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, State Auto National Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Ohio, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Meridian Insurance Group, Inc., Farmers Casualty Insurance Company, Stateco Financial Services, Inc., Strategic Insurance Software, Inc., 518 Property Management and Leasing, LLC, State Auto Florida Insurance Company, Beacon National Insurance Company, Beacon Lloyds, Inc., Beacon Lloyds Insurance Company, Patrons Mutual Insurance Company of Connecticut, Litchfield Mutual Fire Insurance Company, and Provision State Insurance Company
|
|
Form 8-K Current Report filed on January 27, 2009 (see Exhibit 10.1 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.32
|
|
Third Amendment, effective as of December 31, 2010, to the Management and Operations Agreement, Amended and Restated as of January 1, 2005, among State Auto Financial Corporation, State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Ohio, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Meridian Insurance Group, Inc., Farmers Casualty Insurance Company, Stateco Financial Services, Inc., Strategic Insurance Software, Inc., 518 Property Management and Leasing, LLC, State Auto Florida Insurance Company, Beacon National Insurance Company, Beacon Lloyds, Inc., Beacon Lloyds Insurance Company, Patrons Mutual Insurance Company of Connecticut and Litchfield Mutual Fire Insurance Company
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.36 therein)
|
|
|
|
|
|
10.33
|
|
Consulting Services Agreement dated as of November 1, 2009, by and between State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Farmers Casualty Insurance Company, Milbank Insurance Company, and RTW, Inc.
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2009 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.34
|
|
Amended and Restated Appendix B , effective as of January 1, 2013, to the Consulting Service Agreement, dated as of November 1, 2009, by and between State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Farmers Casualty Insurance Company, Milbank Insurance Company, and RTW, Inc.
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.35 therein)
|
|
|
|
|
|
10.35
|
|
Underwriting Management Agreement effective as of November 20, 2009, by and between Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company, Bloomington Compensation Insurance Company, State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Meridian Security Insurance Company, Milbank Insurance Company, Farmers Casualty Insurance Company, and Risk Evaluation and Design, LLC
|
|
Form 8-K Current Report filed on November 25, 2009 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.36
|
|
Amended and Restated Management and Operations Agreement, effective as of January 1, 2011, by and among State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company, Bloomington Compensation Insurance Company, Rockhill Holding Company, National Environmental Coverage Corporation of the South, LLC, National Environmental Coverage Corporation, RTW, Inc., Rockhill Insurance Services, LLC and Rockhill Underwriting Management, LLC.
|
|
Form 8-K Current Report filed on January 7, 2011 (see Exhibit 10.2 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.37
|
|
First Amendment, effective as of January 1, 2013, to Amended and Restated Management and Operations Agreement, effective as of January 1, 2011 by and among State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company, Bloomington Compensation Insurance Company, Rockhill Holding Company, National Environmental Coverage Corporation of the South, LLC, National Environmental Coverage Corporation, RTW, Inc., Rockhill Insurance Services, LLC and Rockhill Underwriting Management, LLC.
|
|
Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.38 therein)
|
|
|
|
|
|
10.38
|
|
Reinsurance Pooling Agreement Amended and Restated as of January 1, 2011, entered into as of January 3, 2011, by and among State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Wisconsin, Farmers Casualty Insurance Company, State Auto Insurance Company of Ohio, State Auto Florida Insurance Company, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Patrons Mutual Insurance Company of Connecticut, Litchfield Mutual Fire Insurance Company, Beacon National Insurance Company, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company and Bloomington Compensation Insurance Company
|
|
Form 8-K Current Report filed on January 7, 2011 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.39
|
|
First Amendment, effective December 31, 2011, to Reinsurance Pooling Agreement Amended and Restated as of January 1, 2011 by and among State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Wisconsin, Farmers Casualty Insurance Company, State Auto Insurance Company of Ohio, State Auto Florida Insurance Company, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Patrons Mutual Insurance Company of Connecticut, Litchfield Mutual Fire Insurance Company, Beacon National Insurance Company, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company and Bloomington Compensation Insurance Company
|
|
Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.45 therein)
|
|
|
|
|
|
10.40
|
|
Second Amendment, effective March 31, 2013, to Reinsurance Pooling Agreement Amended and Restated as of January 1, 2011 by and among State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Wisconsin, State Auto Insurance Company of Ohio, Meridian Security Insurance Company, Meridian Citizens Mutual Insurance Company, Patrons Mutual Insurance Company of Connecticut, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company and Bloomington Compensation Insurance Company
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2013 (see Exhibit 10.1 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.41
|
|
Third Amendment, effective July 1, 2014, to Reinsurance Pooling Agreement Amended and Restated as of January 1, 2011 by and among State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Milbank Insurance Company, State Auto Insurance Company of Wisconsin, State Auto Insurance Company of Ohio, Meridian Security Insurance Company, Patrons Mutual Insurance Company of Connecticut, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company and Bloomington Compensation Insurance Company
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2014 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.42
|
|
Homeowners Quota Share Reinsurance Contract between State Automobile Mutual Insurance Company (on behalf of itself and insurance subsidiaries and affiliates now under its ownership, control or management, including insurance subsidiaries of State Auto Financial Corporation) and a syndicate of reinsurers effective December 31, 2011 at 11:59 p.m.
|
|
Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.46 therein)
|
|
|
|
|
|
10.43
|
|
Amended and Restated Declaration of Trust of STFC Capital Trust I, dated as of May 22, 2003
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2003 (see 10(XX) therein)
|
|
|
|
|
|
10.44
|
|
Indenture dated as of May 22, 2003, for Floating Rate Junior Subordinated Debt Securities Due 2033
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2003 (see 10(YY) therein)
|
|
|
|
|
|
10.45
|
|
Credit Agreement dated as of May 19, 2009, between State Automobile Mutual Insurance Company, as borrower, and Milbank Insurance Company, as lender
|
|
Form 8-K Current Report filed on May 26, 2009 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.46
|
|
Credit Agreement dated as of September 29, 2011, among State Auto Financial Corporation, as borrower, a syndicate of financial institutions, as the lenders party thereto, KeyBank National Association, as Administrative Agent, Lead Arranger, Sole Book Runner and Swingline Lender, and JPMorgan Chase Bank, N.A. and PNC BANK, National Association, as Co-Documentation Agents.
|
|
Form 8-K Current Report filed on July 30, 2013 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.47
|
|
Credit Agreement dated as of July 26, 2013, among State Auto Property & Casualty, as borrower, a syndicate of financial institutions, as the lenders party thereto, KeyBank National Association, as Administrative Agent, Lead Arranger, Sole Book Runner and Swingline Lender, and JPMorgan Chase Bank, N.A. and PNC BANK, National Association, as Co-Documentation Agents.
|
|
Form 8-K Current Report filed on September 30, 2011 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.48*
|
|
Employment Agreement, dated as of December 20, 2011, commencing as of January 1, 2012, among State Auto Financial Corporation, State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company and Robert P. Restrepo, Jr.
|
|
Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.55 therein)
|
|
|
|
|
|
10.49*
|
|
Executive Agreement dated as of December 20, 2011, among State Auto Financial Corporation, State Automobile Mutual Insurance Company and Robert P. Restrepo, Jr.
|
|
Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.57 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.50*
|
|
Employment Agreement (dated as of November 17, 2008), including Amendment to Employment Agreement (dated as of November 30, 2010), among Rockhill Holding Company, State Automobile Mutual Insurance Company and Jessica E. Buss
|
|
Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.61 therein)
|
|
|
|
|
|
10.51*
|
|
Executive Change of Control Agreement dated as of October 27, 2014, among State Auto Financial Corporation, State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company and Steven E. English
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2014 (see Exhibit 10.02 therein)
|
|
|
|
|
|
10.52*
|
|
Executive Change of Control Agreement dated as of October 27, 2014, among State Auto Financial Corporation, State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company and Clyde H. Fitch, Jr
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2014 (see Exhibit 10.03 therein)
|
|
|
|
|
|
10.53*
|
|
Executive Change of Control Agreement dated as of October 27, 2014, among State Auto Financial Corporation, State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company and James A. Yano
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2014 (see Exhibit 10.04 therein)
|
|
|
|
|
|
10.54*
|
|
Executive Change of Control Agreement dated as of October 27, 2014, among State Auto Financial Corporation, State Auto Property & Casualty Insurance Company, State Automobile Mutual Insurance Company and Jessica E. Buss
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2014 (see Exhibit 10.05 therein)
|
|
|
|
|
|
10.55*
|
|
Form of Indemnification Agreement between State Auto Financial Corporation and each of its directors
|
|
Form 8-K Current Report filed on November 20, 2008 (see Exhibit 99.1 therein)
|
|
|
|
|
|
10.56*
|
|
Indemnification Agreement dated as of November 14, 2008, between State Auto Financial Corporation and Robert P. Restrepo, Jr.
|
|
Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.2 therein)
|
|
|
|
|
|
10.57*
|
|
Officer Indemnification Agreement dated as of May 8, 2009, between State Auto Financial Corporation and Steven E. English
|
|
Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.3 therein)
|
|
|
|
|
|
10.58*
|
|
Officer Indemnification Agreement dated as of May 8, 2009, between State Auto Financial Corporation and Clyde H. Fitch, Jr.
|
|
Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.5 therein)
|
|
|
|
|
|
10.59*
|
|
Officer Indemnification Agreement dated as of May 8, 2009, between State Auto Financial Corporation and James A. Yano
|
|
Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.6 therein)
|
|
|
|
|
|
10.60*
|
|
Amended and Restated Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.60 therein)
|
|
|
|
|
|
10.61*
|
|
Amendment Number 1 to the Amended and Restated Equity Incentive Compensation Plan of State Auto Financial Corporation (amendment effective August 15, 2008)
|
|
Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.63 therein)
|
|
|
|
|
|
10.62*
|
|
Restricted Stock Agreement under the Amended and Restated Equity Incentive Compensation Plan dated as of November 5, 2007, between State Auto Financial Corporation and Clyde H. Fitch
|
|
Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.66 therein)
|
|
|
|
|
|
10.63*
|
|
Form of Non-Qualified Stock Option Agreement under the Amended and Restated Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.62 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.64*
|
|
Non-Qualified Stock Option Agreement under the Amended and Restated Equity Incentive Compensation Plan of State Auto Financial Corporation dated March 2, 2006 between State Auto Financial Corporation and Robert P. Restrepo, Jr.
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.51 therein)
|
|
|
|
|
|
10.65*
|
|
Form of Incentive Stock Option Agreement under the Amended and Restated Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.63 therein)
|
|
|
|
|
|
10.66*
|
|
2009 Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.7 therein)
|
|
|
|
|
|
10.67*
|
|
Amendment No. 1 to the 2009 Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2011 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.68*
|
|
Amendment No. 2 to the 2009 Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2013 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.69*
|
|
Amendment No. 3 to the 2009 Equity Incentive Compensation Plan of State Auto Financial Corporation
|
|
Included herein
|
|
|
|
|
|
10.70*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated as of March 4, 2010 between State Auto Financial Corporation and Robert P. Restrepo, Jr.
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2010 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.71*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated March 3, 2011, between State Auto Financial Corporation and Robert P. Restrepo, Jr.
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2011 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.72*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated March 1, 2012, between State Auto Financial Corporation and Robert P. Restrepo Jr.
|
|
Form 8-K Current Report filed on May 10, 2012 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.73*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated as of March 6, 2014 between State Auto Financial Corporation and Robert P. Restrepo, Jr.
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2014 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.74*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated as of March 6, 2014 between State Auto Financial Corporation and Steven E. English
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2014 (see Exhibit 10.02 therein)
|
|
|
|
|
|
10.75*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated as of March 6, 2014 between State Auto Financial Corporation and Clyde H. Fitch, Jr.
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2014 (see Exhibit 10.03 therein)
|
|
|
|
|
|
10.76*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated as of March 6, 2014 between State Auto Financial Corporation and Jessica E. Buss
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2014 (see Exhibit 10.04 therein)
|
|
|
|
|
|
10.77*
|
|
Restricted Stock Agreement under the 2009 Equity Incentive Compensation Plan dated as of March 6, 2014 between State Auto Financial Corporation and James A. Yano
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2014 (see Exhibit 10.05 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.78*
|
|
Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.61 therein)
|
|
|
|
|
|
10.79*
|
|
First Amendment to the Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.54 therein)
|
|
|
|
|
|
10.80*
|
|
Second Amendment to the Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation
|
|
Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.72 therein)
|
|
|
|
|
|
10.81*
|
|
Third Amendment to the Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation
|
|
Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.73 therein)
|
|
|
|
|
|
10.82*
|
|
Fourth Amendment to the Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation effective November 1, 2010
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.89 therein)
|
|
|
|
|
|
10.83*
|
|
Form of Restricted Share Unit Agreement for the Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.64 therein)
|
|
|
|
|
|
10.84*
|
|
Form of Designation of Beneficiary for the Outside Directors Restricted Share Unit Plan of State Auto Financial Corporation
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.65 therein)
|
|
|
|
|
|
10.85*
|
|
Supplemental Retirement Plan for Executive Employees of State Auto Insurance Companies effective as of May 1, 2010
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2010 (see Exhibit 10.01 therein)
|
|
|
|
|
|
10.86*
|
|
First Amendment to the Supplemental Retirement Plan for Executive Employees of State Auto Insurance Companies (amendment effective December 1, 2010)
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.96 therein)
|
|
|
|
|
|
10.87*
|
|
State Auto Financial Corporation Supplemental Executive Retirement Plan, effective January 1, 2007
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2007 (see Exhibit 10.72 therein)
|
|
|
|
|
|
10.88*
|
|
First Amendment to the State Auto Financial Corporation Supplemental Executive Retirement Plan effective December 1, 2010
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.98 therein)
|
|
|
|
|
|
10.89*
|
|
Form of Designation of Distribution Election for the State Auto Financial Corporation Supplemental Executive Retirement Plan
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2007 (see Exhibit 10.73 therein)
|
|
|
|
|
|
10.90*
|
|
State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (amended and restated as of March 1, 2001)
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.58 therein)
|
|
|
|
|
|
10.91*
|
|
First Amendment to the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (amendment effective as of December 1, 2005)
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.59 therein)
|
|
|
|
|
|
10.92*
|
|
Second Amendment to the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (amendment effective as of January 1, 2009)
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2008 (see Exhibit 10.02 therein)
|
|
|
|
|
|
10.93*
|
|
Third Amendment to the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan (amendment effective as of January 1, 2009)
|
|
Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.84 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.94*
|
|
Fourth Amendment to the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan effective November 1, 2010
|
|
1933 Act Registration Statement No. 333-170564 on Form S-8 (see Exhibit 4(j) therein)
|
|
|
|
|
|
10.95*
|
|
Fifth Amendment to the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan effective January 1, 2012
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2012 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.96*
|
|
Agreement of Assignment and Assumption dated as of March 1, 2001, among State Auto Financial Corporation, State Automobile Mutual Insurance Company, State Auto Property and Casualty Insurance Company, and Midwest Security Insurance Company (nka State Auto Insurance Company of Wisconsin) regarding the State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.60 therein)
|
|
|
|
|
|
10.97*
|
|
Form of State Auto Insurance Companies Directors Deferred Compensation Agreement
|
|
Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.61 therein)
|
|
|
|
|
|
10.98*
|
|
State Auto Property & Casualty Insurance Company Amended and Restated Incentive Deferred Compensation Plan effective as of March 1, 2010
|
|
1933 Act Registration Statement No. 333-165366 on Form S-8 (see Exhibit 4(e) therein)
|
|
|
|
|
|
10.99*
|
|
First Amendment to the State Auto Property & Casualty Insurance Company Amended and Restated Incentive Deferred Compensation Plan (amendment effective July 1, 2010)
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2010 (see Exhibit 10.02 therein)
|
|
|
|
|
|
10.100*
|
|
Second Amendment to the State Auto Property & Casualty Insurance Company Amended and Restated Incentive Deferred Compensation Plan (amendment effective November 1, 2010)
|
|
1933 Act Registration Statement No. 333-170568 on Form S-8 (see Exhibit 4(h) therein)
|
|
|
|
|
|
10.101*
|
|
Third Amendment to the State Auto Property & Casualty Insurance Company Amended and Restated Incentive Deferred Compensation Plan (amendment effective January 1, 2011)
|
|
Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.109 therein)
|
|
|
|
|
|
10.102*
|
|
State Auto Financial Corporation Leadership Bonus Plan
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2007 (see Exhibit 10.64 therein)
|
|
|
|
|
|
10.103*
|
|
First Amendment to the State Auto Financial Corporation Leadership Bonus Plan (amendment effective as of January 1, 2009)
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2008 (see Exhibit 10.04 therein)
|
|
|
|
|
|
10.104*
|
|
Second Amendment to the State Auto Financial Corporation Leadership Bonus Plan (amendment effective as of January 1, 2012)
|
|
Form 8K Current Report filed on May 10, 2012 (see Exhibit 10.2 therein)
|
|
|
|
|
|
10.105*
|
|
State Auto Financial Corporation Long-Term Incentive Plan
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2007 (see Exhibit 10.65 therein)
|
|
|
|
|
|
10.106*
|
|
First Amendment to the State Auto Financial Corporation Long-Term Incentive Plan (amendment effective as of January 1, 2008)
|
|
Form 8-K Current Report filed on March 13, 2008 (see Exhibit 10.5 therein)
|
|
|
|
|
|
10.107*
|
|
Second Amendment to the State Auto Financial Corporation Long-Term Incentive Plan (amendment effective as of January 1, 2009)
|
|
Form 10-Q Quarterly Report for the period ended September 30, 2008 (see Exhibit 10.05 therein)
|
|
|
|
|
|
10.108*
|
|
Third Amendment to the State Auto Financial Corporation Long-Term Incentive Plan (amendment effective as of January 1, 2012)
|
|
Form 8-K Current Report filed on May 10, 2012 (see Exhibit 10.3 therein)
|
|
|
|
|
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
10.109*
|
|
Underwriting Management Agreement effective as of November 20, 2009, by and between Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company, Bloomington Compensation Insurance Company, State Automobile Mutual Insurance Company, State Auto Property & Casualty Insurance Company, Meridian Security Insurance Company, Milbank Insurance Company, Farmers Casualty Insurance Company, and Risk Evaluation and Design, LLC
|
|
Form 8-K Current Report filed on November 25, 2009 (see Exhibit 10.1 therein)
|
|
|
|
|
|
10.110*
|
|
Blanket Security Agreement effective February 15, 2013 between State Auto Property & Casualty Insurance Company and Federal Home Loan Bank of Cincinnati
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2013 (see Exhibit 10.02 therein)
|
|
|
|
|
|
10.111*
|
|
Insurance Company Member Addendum to Blanket Security Agreement effective February 15, 2013 between State Auto Property & Casualty Insurance Company and Federal Home Loan Bank of Cincinnati
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2013 (see Exhibit 10.03 therein)
|
|
|
|
|
|
10.112*
|
|
Application for Callable Advance signed July 10, 2013 by State Auto Property & Casualty Insurance Company with respect to Blanket Security Agreement effective February 15, 2013 between State Auto Property & Casualty Insurance Company and Federal Home Loan Bank of Cincinnati
|
|
Form 10-Q Quarterly Report for the period ended June 30, 2013 (see Exhibit 10.04 therein)
|
|
|
|
|
|
21.01
|
|
List of Subsidiaries of State Auto Financial Corporation
|
|
Included herein
|
|
|
|
|
|
23.01
|
|
Consent of Independent Registered Public Accounting Firm
|
|
Included herein
|
|
|
|
|
|
24.01
|
|
Powers of Attorney—Robert P. Restrepo, Jr., David J. D’Antoni, David R. Meuse, S. Elaine Roberts, Alexander B. Trevor and Paul S. Williams
|
|
Form 10-K Annual Report for the year ended December 31, 2007 (see Exhibit 24.01 therein)
|
|
|
|
|
|
24.02
|
|
Powers of Attorney—Robert E. Baker and Thomas E. Markert
|
|
Form 10-Q Quarterly Report for the period ended March 31, 2008 (see Exhibit 24.01 therein)
|
|
|
|
|
|
24.03
|
|
Power of Attorney—Eileen A. Mallesch
|
|
Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 24.03 therein)
|
|
|
|
|
|
31.01
|
|
CEO certification required by Section 302 of Sarbanes-Oxley Act of 2002
|
|
Included herein
|
|
|
|
|
|
31.02
|
|
CFO certification required by Section 302 of Sarbanes-Oxley Act of 2002
|
|
Included herein
|
|
|
|
|
|
32.01
|
|
CEO certification required by Section 906 of Sarbanes-Oxley Act of 2002
|
|
Included herein
|
|
|
|
|
|
32.02
|
|
CFO certification required by Section 906 of Sarbanes-Oxley Act of 2002
|
|
Included herein
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
Included herein
|
|
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
Included herein
|
|
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
Included herein
|
|
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Definition Linkbase Document
|
|
Included herein
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Included herein
|
Exhibit
No.
|
|
Description of Exhibit
|
|
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Included herein
|
*
|
Constitutes either a management contract or a compensatory plan or arrangement required to be filed as an Exhibit.
|
(b)
|
EXHIBITS
|
(c)
|
FINANCIAL STATEMENT SCHEDULES
|
|
S
TATE
A
UTO
F
INANCIAL
C
ORPORATION
|
|
|
Dated: March 3, 2015
|
/
S
/ R
OBERT
P. R
ESTREPO
, J
R
.
|
|
Robert P. Restrepo, Jr.
|
|
Chairman, President and Chief Executive Officer
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ R
OBERT
P. R
ESTREPO
, J
R
.
|
|
Chairman, President and Chief Executive Officer
|
|
March 3, 2015
|
Robert P. Restrepo, Jr.
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
/
S
/ S
TEVEN
E. E
NGLISH
|
|
Senior Vice President and Chief Financial Officer
|
|
March 3, 2015
|
Steven E. English
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
/
S
/ Matthew R. Pollak
|
|
Vice President, Treasurer and Chief Accounting Officer
|
|
March 3, 2015
|
Matthew R. Pollak
|
|
(principal accounting officer)
|
|
|
|
|
|
|
|
D
AVID
J. D’A
NTONI
*
|
|
Director
|
|
March 3, 2015
|
David J. D’Antoni
|
|
|
|
|
|
|
|
|
|
R
OBERT
E. B
AKER
*
|
|
Director
|
|
March 3, 2015
|
Robert E. Baker
|
|
|
|
|
|
|
|
|
|
T
HOMAS
E. M
ARKERT
*
|
|
Director
|
|
March 3, 2015
|
Thomas E. Markert
|
|
|
|
|
|
|
|
|
|
D
AVID
R. M
EUSE
*
|
|
Director
|
|
March 3, 2015
|
David R. Meuse
|
|
|
|
|
|
|
|
|
|
S. E
LAINE
R
OBERTS
*
|
|
Director
|
|
March 3, 2015
|
S. Elaine Roberts
|
|
|
|
|
|
|
|
|
|
E
ILEEN
A. M
ALLESCH
*
|
|
Director
|
|
March 3, 2015
|
Eileen A. Mallesch
|
|
|
|
|
|
|
|
|
|
A
LEXANDER
B. T
REVOR
*
|
|
Director
|
|
March 3, 2015
|
Alexander B. Trevor
|
|
|
|
|
|
|
|
|
|
P
AUL
S. W
ILLIAMS
*
|
|
Director
|
|
March 3, 2015
|
Paul S. Williams
|
|
|
|
|
*
|
Steven E. English by signing his name hereto, does sign this document on behalf of the person indicated above pursuant to a Power of Attorney duly executed by such person.
|
/
S
/ S
TEVEN
E. E
NGLISH
|
|
Attorney in Fact
|
|
March 3, 2015
|
Steven E. English
|
|
|
|
|
($ millions)
|
|
|
|
|
|
|||||||
December 31, 2014
|
Cost or
amortized
cost
(1)
|
|
Fair
value
|
|
Amount at
which shown
in the
balance sheet
|
|||||||
Available-for-sale:
|
|
|
|
|
|
|||||||
Fixed maturities:
|
|
|
|
|
|
|||||||
U.S. treasury securities and obligations of U.S. government agencies
|
$
|
296.7
|
|
|
$
|
309.3
|
|
|
$
|
309.3
|
|
|
Obligations of states and political subdivisions
|
742.5
|
|
|
769.5
|
|
|
769.5
|
|
||||
Corporate securities
|
333.4
|
|
|
340.6
|
|
|
340.6
|
|
||||
U.S. government agencies residential mortgage-backed securities
|
458.7
|
|
|
472.5
|
|
|
472.5
|
|
||||
Total fixed maturities
|
1,831.3
|
|
|
1,891.9
|
|
|
1,891.9
|
|
||||
Equity securities:
|
|
|
|
|
|
|||||||
Large-cap securities
|
185.5
|
|
|
242.2
|
|
|
242.2
|
|
||||
Small-cap securities
|
50.0
|
|
|
68.2
|
|
|
68.2
|
|
||||
Total equity securities
|
235.5
|
|
|
310.4
|
|
|
310.4
|
|
||||
Other invested assets
|
50.5
|
|
|
80.3
|
|
|
80.3
|
|
||||
Total available-for-sale securities
|
2,117.3
|
|
|
2,282.6
|
|
|
2,282.6
|
|
||||
Other invested assets
|
5.3
|
|
|
5.3
|
|
|
5.3
|
|
||||
Total investments – other than investments in related parties
|
$
|
2,122.6
|
|
|
$
|
2,287.9
|
|
|
$
|
2,287.9
|
|
|
|
|
|
|
|
|
|
||||||
(1)
|
Original cost of equity securities and, as to fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts.
|
(in millions, except per share amounts)
|
December 31
|
||||||
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Investments in common stock of subsidiaries (equity method)
|
$
|
960.7
|
|
|
$
|
891.1
|
|
Fixed maturities, available-for-sale, at fair value
|
0.9
|
|
|
1.6
|
|
||
Other invested assets
|
2.8
|
|
|
2.6
|
|
||
Cash and cash equivalents
|
11.5
|
|
|
6.1
|
|
||
Other assets
|
0.3
|
|
|
0.4
|
|
||
Due from affiliates
|
—
|
|
|
1.5
|
|
||
Federal income tax, net
|
21.2
|
|
|
4.6
|
|
||
Total assets
|
$
|
997.4
|
|
|
$
|
907.9
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Notes payable (affiliates $116.8 and $116.8, respectively)
|
$
|
116.8
|
|
|
$
|
116.8
|
|
Due to affiliates
|
0.5
|
|
|
—
|
|
||
Other liabilities
|
7.2
|
|
|
6.1
|
|
||
Total liabilities
|
124.5
|
|
|
122.9
|
|
||
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; 47.7 and 47.5 shares issued, respectively, at stated value of $2.50 per share
|
119.3
|
|
|
118.8
|
|
||
Treasury stock, 6.8 and 6.8 shares, respectively, at cost
|
(116.0
|
)
|
|
(115.9
|
)
|
||
Additional paid-in capital
|
143.2
|
|
|
137.5
|
|
||
Accumulated other comprehensive income
|
71.7
|
|
|
80.8
|
|
||
Retained earnings
|
654.7
|
|
|
563.8
|
|
||
Total stockholders’ equity
|
872.9
|
|
|
785.0
|
|
||
Total liabilities and stockholders’ equity
|
$
|
997.4
|
|
|
$
|
907.9
|
|
|
|
|
|
($ millions)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net investment income
|
$
|
0.3
|
|
|
$
|
0.3
|
|
|
$
|
0.2
|
|
Net realized gain on investments
|
—
|
|
|
0.7
|
|
|
0.4
|
|
|||
Total revenues
|
0.3
|
|
|
1.0
|
|
|
0.6
|
|
|||
Interest expense (affiliates $6.0, $3.2 and $0.7, respectively)
|
6.0
|
|
|
8.8
|
|
|
7.0
|
|
|||
Other operating expenses
|
5.6
|
|
|
6.8
|
|
|
5.8
|
|
|||
Total expenses
|
11.6
|
|
|
15.6
|
|
|
12.8
|
|
|||
Loss before federal income taxes
|
(11.3
|
)
|
|
(14.6
|
)
|
|
(12.2
|
)
|
|||
Federal income tax benefit
|
(20.6
|
)
|
|
(4.8
|
)
|
|
(1.7
|
)
|
|||
Net income (loss) before equity in net income of subsidiaries
|
9.3
|
|
|
(9.8
|
)
|
|
(10.5
|
)
|
|||
Equity in net income of subsidiaries
|
98.1
|
|
|
70.6
|
|
|
21.2
|
|
|||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
|
|
|
|
|
|
($ millions, except per share amounts)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
||||||
Net unrealized holding (losses) gains on investments:
|
|
|
|
|
|
||||||
Unrealized holding (losses) gains arising during the year
|
(0.2
|
)
|
|
0.5
|
|
|
0.7
|
|
|||
Reclassification adjustments for gains realized in net income
|
—
|
|
|
(0.7
|
)
|
|
(0.4
|
)
|
|||
Income tax benefit
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Total net unrealized holding (losses) gains on investments
|
(0.1
|
)
|
|
(0.2
|
)
|
|
0.3
|
|
|||
Unrealized equity in subsidiaries
|
(9.0
|
)
|
|
(3.2
|
)
|
|
20.1
|
|
|||
Other comprehensive (loss) income
|
(9.1
|
)
|
|
(3.4
|
)
|
|
20.4
|
|
|||
Comprehensive income
|
$
|
98.3
|
|
|
$
|
57.4
|
|
|
$
|
31.1
|
|
|
|
|
|
|
|
($ millions)
|
Year ended December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
107.4
|
|
|
$
|
60.8
|
|
|
$
|
10.7
|
|
Adjustments to reconcile net income to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization, net
|
—
|
|
|
1.3
|
|
|
(0.3
|
)
|
|||
Share-based compensation
|
0.9
|
|
|
1.6
|
|
|
0.4
|
|
|||
Net realized gain on investments
|
—
|
|
|
(0.7
|
)
|
|
(0.4
|
)
|
|||
Equity in net income from consolidated subsidiaries
|
(98.1
|
)
|
|
(70.6
|
)
|
|
(21.2
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Other liabilities and due from affiliates
|
0.5
|
|
|
0.1
|
|
|
1.5
|
|
|||
Other assets
|
—
|
|
|
0.5
|
|
|
0.3
|
|
|||
Excess tax benefits on share-based awards
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Federal income taxes, net
|
(16.6
|
)
|
|
(3.1
|
)
|
|
(1.2
|
)
|
|||
Net cash used in operating activities
|
(5.9
|
)
|
|
(10.0
|
)
|
|
(10.2
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Dividends received from consolidated subsidiaries
|
24.0
|
|
|
13.8
|
|
|
27.0
|
|
|||
Purchases of equity securities – available-for-sale
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|||
Purchases of other invested assets
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.3
|
)
|
|||
Maturities, calls and pay downs of fixed maturities – available-for-sale
|
0.5
|
|
|
0.2
|
|
|
2.5
|
|
|||
Sales of fixed maturities – available-for-sale
|
0.3
|
|
|
3.9
|
|
|
0.3
|
|
|||
Sales of equity securities – available-for-sale
|
—
|
|
|
3.7
|
|
|
3.2
|
|
|||
Net cash provided by investing activities
|
24.4
|
|
|
21.4
|
|
|
29.5
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
3.5
|
|
|
4.0
|
|
|
1.6
|
|
|||
Payments to acquire treasury stock
|
(0.1
|
)
|
|
(0.1
|
)
|
|
—
|
|
|||
Payment of dividends
|
(16.5
|
)
|
|
(16.1
|
)
|
|
(22.3
|
)
|
|||
Excess tax benefits on share-based awards
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Proceeds from long-term debt
|
—
|
|
|
100.0
|
|
|
—
|
|
|||
Redemption of long-term debt
|
—
|
|
|
(100.0
|
)
|
|
—
|
|
|||
Net cash used in financing activities
|
(13.1
|
)
|
|
(12.3
|
)
|
|
(20.7
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
5.4
|
|
|
(0.9
|
)
|
|
(1.4
|
)
|
|||
Cash and cash equivalents at beginning of year
|
6.1
|
|
|
7.0
|
|
|
8.4
|
|
|||
Cash and cash equivalents at end of year
|
$
|
11.5
|
|
|
$
|
6.1
|
|
|
$
|
7.0
|
|
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Federal income tax received
|
$
|
4.3
|
|
|
$
|
1.5
|
|
|
$
|
0.4
|
|
Interest paid (affiliates $6.0, $3.2 and $0.7, respectively)
|
$
|
(6.0
|
)
|
|
$
|
(8.0
|
)
|
|
$
|
(7.0
|
)
|
|
|
|
|
|
|
($ millions, except interest rates)
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||
Carrying
value
|
|
Fair
Value
|
|
Interest
rate
|
|
Carrying
value
|
|
Fair
value
|
|
Interest
rate
|
|||||||||
Affiliate note payable with Milbank, issued $15.0, July 2013 with fixed interest
|
$
|
15.0
|
|
|
$
|
14.8
|
|
|
5.28
|
%
|
|
15.0
|
|
|
14.4
|
|
|
5.28
|
%
|
Affiliate note payable with State Auto P&C, issued $85.0, July 2013 with fixed interest
|
85.0
|
|
|
83.9
|
|
|
5.28
|
%
|
|
85.0
|
|
|
81.4
|
|
|
5.28
|
%
|
||
Total notes payable to affiliates
|
$
|
100.0
|
|
|
$
|
98.7
|
|
|
|
|
100.0
|
|
|
95.8
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
($ millions)
Segment
|
Deferred
policy
acquisition
cost
|
|
Future
benefits,
claims and
losses
(1)
|
|
Unearned
premiums
|
|
Other policy
claims and
benefits
payable
|
|
Premium
revenue
|
||||||||||
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal insurance segment
|
$
|
48.9
|
|
|
$
|
201.9
|
|
|
$
|
270.7
|
|
|
$
|
—
|
|
|
$
|
451.4
|
|
Business insurance segment
|
41.4
|
|
|
349.8
|
|
|
201.9
|
|
|
—
|
|
|
381.8
|
|
|||||
Specialty insurance segment
|
36.2
|
|
|
421.9
|
|
|
139.8
|
|
|
—
|
|
|
240.9
|
|
|||||
Investment operations segment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
126.5
|
|
|
$
|
973.6
|
|
|
$
|
612.4
|
|
|
$
|
—
|
|
|
$
|
1,074.1
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal insurance segment
|
$
|
31.5
|
|
|
$
|
223.7
|
|
|
$
|
189.9
|
|
|
$
|
—
|
|
|
$
|
464.0
|
|
Business insurance segment
|
38.8
|
|
|
359.6
|
|
|
193.1
|
|
|
—
|
|
|
364.2
|
|
|||||
Specialty insurance segment
|
26.5
|
|
|
367.5
|
|
|
108.0
|
|
|
—
|
|
|
226.8
|
|
|||||
Investment operations segment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
96.8
|
|
|
$
|
950.8
|
|
|
$
|
491.0
|
|
|
$
|
—
|
|
|
$
|
1,055.0
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
||||||||||
Personal insurance segment
|
$
|
30.1
|
|
|
$
|
231.0
|
|
|
$
|
188.4
|
|
|
$
|
—
|
|
|
$
|
469.8
|
|
Business insurance segment
|
35.0
|
|
|
341.8
|
|
|
180.9
|
|
|
—
|
|
|
327.2
|
|
|||||
Specialty insurance segment
|
26.6
|
|
|
355.9
|
|
|
112.3
|
|
|
—
|
|
|
245.1
|
|
|||||
Investment operations segment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
91.7
|
|
|
$
|
928.7
|
|
|
$
|
481.6
|
|
|
$
|
—
|
|
|
$
|
1,042.1
|
|
Segment
|
Net
investment
income
|
|
Benefits,
losses and
settlement
expenses
(2)
|
|
Amort.
of deferred
policy
acquisition
costs
|
|
Other
operating
expenses
|
|
Premiums
written
|
|||||||||||
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Personal insurance segment
|
$
|
—
|
|
|
$
|
318.3
|
|
|
$
|
75.4
|
|
|
$
|
52.0
|
|
|
$
|
532.1
|
|
|
Business insurance segment
|
—
|
|
|
231.3
|
|
|
81.9
|
|
|
58.1
|
|
|
389.2
|
|
||||||
Specialty insurance segment
|
—
|
|
|
219.0
|
|
|
64.5
|
|
|
30.0
|
|
|
272.9
|
|
||||||
Investment operations segment
|
74.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
74.7
|
|
|
$
|
768.6
|
|
|
$
|
221.8
|
|
|
$
|
140.1
|
|
|
$
|
1,194.2
|
|
|
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Personal insurance segment
|
$
|
—
|
|
|
$
|
342.2
|
|
|
$
|
74.7
|
|
|
$
|
55.5
|
|
|
$
|
465.4
|
|
|
Business insurance segment
|
—
|
|
|
221.8
|
|
|
74.3
|
|
|
73.5
|
|
|
374.8
|
|
||||||
Specialty insurance segment
|
—
|
|
|
158.7
|
|
|
60.6
|
|
|
16.2
|
|
|
221.9
|
|
||||||
Investment operations segment
|
72.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
72.8
|
|
|
$
|
722.7
|
|
|
$
|
209.6
|
|
|
$
|
145.2
|
|
|
$
|
1,062.1
|
|
|
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|||||||||||
Personal insurance segment
|
$
|
—
|
|
|
$
|
344.8
|
|
|
$
|
76.6
|
|
|
$
|
46.6
|
|
|
$
|
469.5
|
|
|
Business insurance segment
|
—
|
|
|
222.5
|
|
|
63.1
|
|
|
80.6
|
|
|
349.4
|
|
||||||
Specialty insurance segment
|
—
|
|
|
211.7
|
|
|
73.4
|
|
|
5.6
|
|
|
236.4
|
|
||||||
Investment operations segment
|
75.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
75.4
|
|
|
$
|
779.0
|
|
|
$
|
213.1
|
|
|
$
|
132.8
|
|
|
$
|
1,055.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1)
|
Segmented balances are net of reinsurance recoverable on losses and loss expenses payable.
|
|||||||||||||||||||
(2)
|
Benefits, losses and settlement expenses are monitored on a statutory basis.
|
($ million, except percentages)
|
|
|
|
Ceded to
|
|
Assumed from
|
|
|
|
|
||||||||||||||||||
|
|
|
Gross
Amount
|
|
Unaffiliated
Companies
|
|
Affiliated
Companies
(1)
|
|
Unaffiliated
Companies
|
|
Affiliated
Companies
(1)
|
|
Net
Amount
|
|
Percentage
of amount
assumed
to net
(2)
|
|||||||||||||
Property-casualty
earned premiums for
year ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2014
|
|
$
|
882.6
|
|
|
$
|
25.3
|
|
|
$
|
861.7
|
|
|
$
|
4.4
|
|
|
$
|
1,074.1
|
|
|
$
|
1,074.1
|
|
|
0.4
|
%
|
|
2013
|
|
874.7
|
|
|
23.5
|
|
|
855.0
|
|
|
3.8
|
|
|
1,055.0
|
|
|
1,055.0
|
|
|
0.4
|
%
|
|||||||
2012
|
|
833.3
|
|
|
28.2
|
|
|
809.2
|
|
|
4.1
|
|
|
1,042.1
|
|
|
1,042.1
|
|
|
0.4
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(1)
|
These columns include the effect of intercompany pooling.
|
|||||||||||||||||||||||||||
(2)
|
Calculated as earned premiums assumed from outside companies to net amount.
|
($ millions)
|
At December 31
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Valuation allowance for deferred tax assets:
|
|
|
|
|
|
||||||
Balance at beginning of period
|
$
|
82.6
|
|
|
$
|
100.5
|
|
|
$
|
103.3
|
|
Deductions
|
82.6
|
|
|
17.9
|
|
|
2.8
|
|
|||
Balance at end of period
|
$
|
—
|
|
|
$
|
82.6
|
|
|
$
|
100.5
|
|
|
|
|
|
|
|
|
/s/ James A. Yano, Senior Vice President
|
|
|
|
11-14-2014
|
|
Date
|
Form
|
|
Registration Number
|
|
Description
|
S-8
|
|
33-44667
|
|
1991 Stock Option Plan
|
|
|
33-89400
|
|
|
S-8
|
|
33-44666
|
|
1991 Directors’ Stock Option Plan
|
S-8
|
|
33-41423
|
|
1991 Employee Stock Purchase and Dividend Reinvestment Plan
|
|
|
333-05755
|
|
|
|
|
333-147333
|
|
|
S-8
|
|
333-56336
|
|
State Auto Insurance Companies Retirement Savings Plan
|
S-8
|
|
333-43882
|
|
2000 Directors’ Stock Option Plan
|
S-8
|
|
333-43880
|
|
2000 Stock Option Plan
|
S-3
|
|
333-14849
|
|
Monthly Stock Purchase Plan for Independent Agents
|
S-3
|
|
333-90529
|
|
1998 State Auto Agents’ Stock Option Plan
|
S-8
|
|
333-127172
|
|
2005 Outside Directors Restricted Share Unit Plan
|
S-8
|
|
333-165364
|
|
State Auto Financial Corporation 2009 Equity Incentive Compensation Plan
|
|
|
333-192158
|
|
|
S-8
|
|
333-165366
|
|
State Auto Property & Casualty Insurance Company Amended and Restated Incentive Deferred Compensation Plan
|
|
|
333-170568
|
|
|
S-8
|
|
333-170564
|
|
State Auto Insurance Companies Amended and Restated Directors Deferred Compensation Plan
|
/s/ Ernst & Young LLP
|
|
|
Columbus, Ohio
|
|
|
March 3, 2015
|
|
|
|
|
|
1.
|
I have reviewed this Form 10-K of State Auto Financial Corporation;
|
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; and
|
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: March 3, 2015
|
|
|
/s/ Robert P. Restrepo, Jr.
|
|
Robert P. Restrepo, Jr.,
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Form 10-K of State Auto Financial Corporation;
|
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; and
|
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: March 3, 2015
|
|
|
/s/ Steven E. English
|
|
Steven E. English,
|
|
Chief Financial Officer
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
|
/s/ Robert P. Restrepo, Jr.
|
|
Robert P. Restrepo, Jr.
|
|
Chief Executive Officer
|
|
March 3, 2015
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|
|
/s/ Steven E. English
|
|
Steven E. English
|
|
Chief Financial Officer
|
|
March 3, 2015
|