☒ | Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
☐ | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Ohio | 31-1324304 | ||||||||||
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer Identification No.) | ||||||||||
518 East Broad Street | Columbus | Ohio | 43215-3976 | ||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common shares, without par value | STFC | The Nasdaq Global Select Market |
Large accelerated filer
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¨ |
Accelerated filer
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ý | ||||||||
Non-accelerated filer
|
o |
Smaller reporting company
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☐ | ||||||||
Emerging growth company
|
☐ |
Form 10-K | Item | Description | Page | ||||||||
Part I | 1 | ||||||||||
1A | |||||||||||
1B | |||||||||||
2 | |||||||||||
3 | |||||||||||
4 | |||||||||||
Part II | 5 | ||||||||||
7 | |||||||||||
7A | |||||||||||
8 | |||||||||||
9 | |||||||||||
9A | |||||||||||
9B | |||||||||||
Part III | 10 | ||||||||||
11 | |||||||||||
12 | |||||||||||
13 | |||||||||||
14 | |||||||||||
Part IV | 15 | ||||||||||
Glossary of Terms for State Auto Financial Corporation and Its Subsidiaries and Affiliates | ||||||||
State Auto Financial or STFC | Refers to our holding company, State Auto Financial Corporation. | |||||||
We, us, our or the Company | 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”), and Stateco Financial Services, Inc. (“Stateco”). | |||||||
State Auto Mutual | Refers to State Automobile Mutual Insurance Company, which owns approximately 59.1% of STFC’s outstanding common shares. | |||||||
STFC Pooled Companies | Refers to State Auto P&C, Milbank, and SA Ohio. | |||||||
Mutual Pooled Companies | Refers to State Auto Mutual, and certain subsidiaries and affiliates of State Auto Mutual, namely, State Auto Insurance Company of Wisconsin (“SA Wisconsin”), Meridian Security Insurance Company (“Meridian Security”), Patrons Mutual Insurance Company of Connecticut (“Patrons Mutual”), Rockhill Insurance Company (“RIC”), Plaza Insurance Company (“Plaza”), American Compensation Insurance Company (“American Compensation”) and Bloomington Compensation Insurance Company (“Bloomington Compensation”). | |||||||
Pooled Companies or our Pooled Companies | Refers to the STFC Pooled Companies and the Mutual Pooled Companies. | |||||||
Rockhill Insurers | Refers to RIC, Plaza, American Compensation and Bloomington Compensation. | |||||||
State Auto Group | Refers to the Pooled Companies | |||||||
Glossary of Selected Insurance and Accounting Terms | ||||||||
Accident year | The calendar year in which loss events occur, regardless of when the losses are actually reported, booked or paid. | |||||||
Accounting standards codification or ASC | The Codification is the single source of authoritative nongovernmental GAAP developed by the Financial Accounting Standards Board (“FASB”). | |||||||
Admitted insurer | 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. | |||||||
American Institute of Certified Public Accountants or AICPA | 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. | |||||||
Allocated loss adjustment expenses or ALAE | The costs that can be related to a specific claim, which may include attorney fees, external claims adjusters and investigation costs, among others. | |||||||
Book value per share | Total common stockholders’ equity divided by the number of common shares outstanding. | |||||||
Catastrophe loss | 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 $25.0 million or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers. | |||||||
Combined ratio | 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. | |||||||
Debt to capital ratio | The ratio of notes payable to the sum of total stockholders’ equity and notes payable. | |||||||
Deferred acquisition costs or DAC | 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. | |||||||
Direct written premiums | 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. | |||||||
Duration | A measure of the sensitivity of a financial asset’s price to interest rate movements. | |||||||
Earned premiums or premiums earned | 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. | |||||||
Excess and surplus lines insurance | 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. | |||||||
Expense ratio or underwriting expense ratio | 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. | |||||||
Financial Accounting Standards Board or FASB | In the United States, a non-governmental body the SEC has charged with establishing and maintaining generally accepted standards for professional accountants. | |||||||
Generally accepted accounting principles or GAAP | Accounting practices used in the United States of America determined by the FASB and American Institute of Certified Public Accountants (“AICPA”). | |||||||
Incurred but not reported reserves or IBNR | 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. | |||||||
Loss adjustment expenses or LAE | 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. | |||||||
Loss and LAE ratio or loss ratio | For both SAP and GAAP, it is the ratio of incurred losses and LAE to earned premiums. | |||||||
Loss reserves | 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. | |||||||
Managing general underwriter or MGU | 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. | |||||||
National Association of Insurance Commissioners or NAIC | 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. | |||||||
Net premiums written to surplus ratio or leverage ratio | 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. | |||||||
Net written premiums | Direct written premiums plus assumed reinsurance premiums less ceded reinsurance premiums. | |||||||
Non-admitted insurer or surplus lines carrier | 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. | |||||||
Retail agent or retail agency | 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. | |||||||
Return on average equity | The percent derived by dividing net income by average total stockholders’ equity. | |||||||
Risk-based capital or RBC | 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. | |||||||
Standard insurance | Insurance which is typically written by admitted insurers. Our personal and commercial insurance segments are comprised of standard insurance. | |||||||
Statutory accounting practices or SAP | The practices and procedures prescribed or permitted by state insurance regulatory authorities in the United States for recording transactions and preparing financial statements. | |||||||
Statutory surplus | 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. | |||||||
Unallocated loss adjustment expenses or ULAE | The costs incurred in settling claims, such as in-house processing costs, which cannot be associated with a specific claim. | |||||||
Underwriting gain or loss | Under SAP, earned premiums less loss and LAE and underwriting expenses. | |||||||
Unearned premiums | 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. | |||||||
Wholesale broker | 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. |
2020 | High | Low | Dividend | ||||||||||||||
First Quarter | $ | 31.81 | $ | 19.51 | $ | 0.10 | |||||||||||
Second Quarter | 27.94 | 16.71 | 0.10 | ||||||||||||||
Third Quarter | 18.76 | 13.34 | 0.10 | ||||||||||||||
Fourth Quarter | 18.74 | 12.07 | 0.10 |
2019 | High | Low | Dividend | ||||||||||||||
First Quarter | $ | 34.99 | $ | 30.33 | $ | 0.10 | |||||||||||
Second Quarter | 35.04 | 32.11 | 0.10 | ||||||||||||||
Third Quarter | 36.45 | 28.46 | 0.10 | ||||||||||||||
Fourth Quarter | 34.75 | 28.10 | 0.10 | ||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||||||||||||||||
STFC | 100.00 | 130.21 | 141.43 | 165.32 | 150.66 | 86.16 | |||||||||||||||||||||||||||||
Nasdaq Index
|
100.00 | 107.50 | 137.86 | 132.51 | 179.19 | 257.38 | |||||||||||||||||||||||||||||
Nasdaq Ins. Index
|
100.00 | 115.63 | 119.32 | 109.16 | 138.32 | 139.62 |
($ millions, except per share data) | 2020 | 2019 | ||||||||||||||||||
GAAP Basis: | ||||||||||||||||||||
Total revenues | $ | 1,482.4 | $ | 1,407.2 | ||||||||||||||||
Income before federal income taxes | $ | 14.4 | $ | 105.5 | ||||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | ||||||||||||||||
Stockholders’ equity | $ | 1,010.0 | $ | 967.5 | ||||||||||||||||
Book value per share | $ | 23.00 | $ | 22.19 | ||||||||||||||||
Return on average equity | 1.3 | % | 9.8 | % | ||||||||||||||||
Debt to capital ratio | 10.8 | % | 11.2 | % | ||||||||||||||||
Cat loss and ALAE ratio | 14.9 | % | 8.0 | % | ||||||||||||||||
Non-cat loss and LAE ratio | 55.5 | % | 59.6 | % | ||||||||||||||||
Loss and LAE ratio | 70.4 | % | 67.6 | % | ||||||||||||||||
Expense ratio | 34.9 | % | 35.4 | % | ||||||||||||||||
Combined ratio | 105.3 | % | 103.0 | % | ||||||||||||||||
Premiums written growth | 10.7 | % | 8.7 | % | ||||||||||||||||
Investment yield | 2.8 | % | 3.0 | % | ||||||||||||||||
SAP Basis: | ||||||||||||||||||||
Cat loss and ALAE ratio | 14.9 | % | 8.0 | % | ||||||||||||||||
Non-cat loss and ALAE ratio | 49.9 | % | 53.7 | % | ||||||||||||||||
ULAE ratio | 5.7 | % | 6.1 | % | ||||||||||||||||
Loss and LAE ratio | 70.5 | % | 67.8 | % | ||||||||||||||||
Expense ratio | 34.4 | % | 34.7 | % | ||||||||||||||||
Combined ratio | 104.9 | % | 102.5 | % | ||||||||||||||||
Net premiums written to surplus | 1.6 | 1.4 |
($ in millions) | ||||||||||||||||||||
2019 | Personal & Commercial | Specialty run-off | Total | |||||||||||||||||
Net written premiums | $ | 1,315.4 | $ | (0.1) | $ | 1,315.3 | ||||||||||||||
Net earned premiums | 1,244.5 | 5.7 | 1,250.2 | |||||||||||||||||
Losses and LAE incurred: | ||||||||||||||||||||
Cat loss and ALAE | 89.9 | 10.6 | 100.5 | |||||||||||||||||
Non-cat loss and ALAE: | ||||||||||||||||||||
Prior accident years non-cat loss and ALAE | (71.3) | (1.1) | (72.4) | |||||||||||||||||
Current accident year non-cat loss and ALAE | 736.9 | 5.2 | 742.1 | |||||||||||||||||
Total non-cat loss and ALAE | 665.6 | 4.1 | 669.7 | |||||||||||||||||
Total Loss and ALAE | 755.5 | 14.7 | 770.2 | |||||||||||||||||
ULAE | 78.3 | (2.0) | 76.3 | |||||||||||||||||
Total Loss and LAE | 833.8 | 12.7 | 846.5 | |||||||||||||||||
Underwriting expenses | 453.1 | 2.7 | 455.8 | |||||||||||||||||
Net underwriting loss | $ | (42.4) | $ | (9.7) | $ | (52.1) | ||||||||||||||
Cat loss and ALAE ratio | 7.2 | % |
N/M(1)
|
8.0 | % | |||||||||||||||
Non-cat loss and ALAE ratio: | ||||||||||||||||||||
Prior accident years non-cat loss and ALAE ratio | (5.7) | % | N/M | (5.8) | % | |||||||||||||||
Current accident year non-cat loss and ALAE ratio | 59.1 | % | N/M | 59.5 | % | |||||||||||||||
Total non-cat loss and ALAE ratio | 53.4 | % | N/M | 53.7 | % | |||||||||||||||
Total Loss and ALAE ratio | 60.6 | % | N/M | 61.7 | % | |||||||||||||||
ULAE ratio | 6.3 | % | N/M | 6.1 | % | |||||||||||||||
Total Loss and LAE ratio | 66.9 | % | N/M | 67.8 | % | |||||||||||||||
Expense ratio | 34.5 | % | N/M | 34.7 | % | |||||||||||||||
Combined ratio | 101.4 | % | N/M | 102.5 | % | |||||||||||||||
(1)N/M = Not Meaningful
|
||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||
2020 | Personal Auto | Homeowners | Other Personal | Total | ||||||||||||||||||||||
Net written premiums | $ | 396.3 | $ | 402.8 | $ | 64.1 | $ | 863.2 | ||||||||||||||||||
Net earned premiums | 407.3 | 360.8 | 50.9 | 819.0 | ||||||||||||||||||||||
Losses and LAE incurred: | ||||||||||||||||||||||||||
Cat loss and ALAE | 6.5 | 99.9 | 12.2 | 118.6 | ||||||||||||||||||||||
Non-cat loss and ALAE: | ||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE | 20.3 | 3.5 | (2.1) | 21.7 | ||||||||||||||||||||||
Current accident year non-cat loss and ALAE | 238.0 | 163.9 | 19.2 | 421.1 | ||||||||||||||||||||||
Total non-cat loss and ALAE | 258.3 | 167.4 | 17.1 | 442.8 | ||||||||||||||||||||||
Total Loss and ALAE | 264.8 | 267.3 | 29.3 | 561.4 | ||||||||||||||||||||||
ULAE | 31.0 | 23.0 | 1.8 | 55.8 | ||||||||||||||||||||||
Total Loss and LAE | 295.8 | 290.3 | 31.1 | 617.2 | ||||||||||||||||||||||
Underwriting expenses | 127.1 | 123.9 | 19.6 | 270.6 | ||||||||||||||||||||||
Net underwriting (loss) gain | $ | (15.6) | $ | (53.4) | $ | 0.2 | $ | (68.8) | ||||||||||||||||||
Cat loss and ALAE ratio | 1.6 | % | 27.7 | % | 24.0 | % | 14.5 | % | ||||||||||||||||||
Non-cat loss and ALAE ratio: | ||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE ratio | 5.0 | % | 1.0 | % | (4.1) | % | 2.7 | % | ||||||||||||||||||
Current accident year non-cat loss and ALAE ratio | 58.4 | % | 45.4 | % | 37.7 | % | 51.4 | % | ||||||||||||||||||
Total non-cat loss and ALAE ratio | 63.4 | % | 46.4 | % | 33.6 | % | 54.1 | % | ||||||||||||||||||
Total Loss and ALAE ratio | 65.0 | % | 74.1 | % | 57.6 | % | 68.6 | % | ||||||||||||||||||
ULAE ratio | 7.6 | % | 6.4 | % | 3.4 | % | 6.8 | % | ||||||||||||||||||
Total Loss and LAE ratio | 72.6 | % | 80.5 | % | 61.0 | % | 75.4 | % | ||||||||||||||||||
Expense ratio | 32.1 | % | 30.7 | % | 30.6 | % | 31.4 | % | ||||||||||||||||||
Combined ratio | 104.7 | % | 111.2 | % | 91.6 | % | 106.8 | % | ||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||
2019 | Personal Auto | Homeowners | Other Personal | Total | ||||||||||||||||||||||
Net written premiums | $ | 421.2 | $ | 326.0 | $ | 41.9 | $ | 789.1 | ||||||||||||||||||
Net earned premiums | 425.0 | 295.9 | 35.0 | 755.9 | ||||||||||||||||||||||
Losses and LAE incurred: | ||||||||||||||||||||||||||
Cat loss and ALAE | 6.0 | 60.1 | 5.0 | 71.1 | ||||||||||||||||||||||
Non-cat loss and ALAE: | ||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE | (10.7) | 0.3 | (2.1) | (12.5) | ||||||||||||||||||||||
Current accident year non-cat loss and ALAE | 284.8 | 142.7 | 16.1 | 443.6 | ||||||||||||||||||||||
Total non-cat loss and ALAE | 274.1 | 143.0 | 14.0 | 431.1 | ||||||||||||||||||||||
Total Loss and ALAE | 280.1 | 203.1 | 19.0 | 502.2 | ||||||||||||||||||||||
ULAE | 30.1 | 19.9 | 1.2 | 51.2 | ||||||||||||||||||||||
Total Loss and LAE | 310.2 | 223.0 | 20.2 | 553.4 | ||||||||||||||||||||||
Underwriting expenses | 129.3 | 102.2 | 13.2 | 244.7 | ||||||||||||||||||||||
Net underwriting (loss) gain | $ | (14.5) | $ | (29.3) | $ | 1.6 | $ | (42.2) | ||||||||||||||||||
Cat loss and ALAE ratio | 1.4 | % | 20.3 | % | 14.1 | % | 9.4 | % | ||||||||||||||||||
Non-cat loss and ALAE ratio: | ||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE ratio | (2.5) | % | 0.1 | % | (5.9) | % | (1.7) | % | ||||||||||||||||||
Current accident year non-cat loss and ALAE ratio | 67.0 | % | 48.2 | % | 45.9 | % | 58.8 | % | ||||||||||||||||||
Total non-cat loss and ALAE ratio | 64.5 | % | 48.3 | % | 40.0 | % | 57.1 | % | ||||||||||||||||||
Total Loss and ALAE ratio | 65.9 | % | 68.6 | % | 54.1 | % | 66.5 | % | ||||||||||||||||||
ULAE ratio | 7.1 | % | 6.8 | % | 3.4 | % | 6.8 | % | ||||||||||||||||||
Total Loss and LAE ratio | 73.0 | % | 75.4 | % | 57.5 | % | 73.3 | % | ||||||||||||||||||
Expense ratio | 30.7 | % | 31.3 | % | 31.6 | % | 31.0 | % | ||||||||||||||||||
Combined ratio | 103.7 | % | 106.7 | % | 89.1 | % | 104.3 | % | ||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||
2020 | Commercial Auto | Small Commercial Package | Middle Market Commercial | Workers' Comp | Farm & Ranch | Other Commercial | Total | |||||||||||||||||||||||||||||||||||||
Net written premiums | $ | 157.1 | $ | 128.2 | $ | 161.4 | $ | 62.8 | $ | 64.2 | $ | 19.6 | $ | 593.3 | ||||||||||||||||||||||||||||||
Net earned premiums | 134.1 | 124.7 | 156.5 | 70.9 | 56.3 | 19.3 | 561.8 | |||||||||||||||||||||||||||||||||||||
Losses and LAE incurred: | ||||||||||||||||||||||||||||||||||||||||||||
Cat loss and ALAE | 1.2 | 21.7 | 42.9 | — | 9.0 | 0.2 | 75.0 | |||||||||||||||||||||||||||||||||||||
Non-cat loss and ALAE | ||||||||||||||||||||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE | (1.6) | (23.0) | (16.7) | (24.9) | (2.2) | (10.0) | (78.4) | |||||||||||||||||||||||||||||||||||||
Current accident year non-cat loss and ALAE | 75.8 | 65.3 | 88.7 | 55.6 | 25.4 | 7.8 | 318.6 | |||||||||||||||||||||||||||||||||||||
Total non-cat loss and ALAE | 74.2 | 42.3 | 72.0 | 30.7 | 23.2 | (2.2) | 240.2 | |||||||||||||||||||||||||||||||||||||
Total Loss and ALAE | 75.4 | 64.0 | 114.9 | 30.7 | 32.2 | (2.0) | 315.2 | |||||||||||||||||||||||||||||||||||||
ULAE | 6.6 | 4.8 | 4.6 | 6.0 | 2.2 | 0.5 | 24.7 | |||||||||||||||||||||||||||||||||||||
Total Loss and LAE | 82.0 | 68.8 | 119.5 | 36.7 | 34.4 | (1.5) | 339.9 | |||||||||||||||||||||||||||||||||||||
Underwriting expenses | 53.1 | 45.1 | 65.3 | 29.9 | 28.1 | 7.8 | 229.3 | |||||||||||||||||||||||||||||||||||||
Net underwriting (loss) gain | $ | (1.0) | $ | 10.8 | $ | (28.3) | $ | 4.3 | $ | (6.2) | $ | 13.0 | $ | (7.4) | ||||||||||||||||||||||||||||||
Cat loss and ALAE ratio | 0.9 | % | 17.4 | % | 27.4 | % | — | % | 16.0 | % | 0.9 | % | 13.4 | % | ||||||||||||||||||||||||||||||
Non-cat loss and ALAE ratio | ||||||||||||||||||||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE ratio | (1.2) | % | (18.5) | % | (10.7) | % | (35.1) | % | (4.0) | % | (51.6) | % | (14.0) | % | ||||||||||||||||||||||||||||||
Current accident year non-cat loss and ALAE ratio | 56.5 | % | 52.5 | % | 56.8 | % | 78.5 | % | 45.2 | % | 40.6 | % | 56.7 | % | ||||||||||||||||||||||||||||||
Total non-cat loss and ALAE ratio | 55.3 | % | 34.0 | % | 46.1 | % | 43.4 | % | 41.2 | % | (11.0) | % | 42.7 | % | ||||||||||||||||||||||||||||||
Total Loss and ALAE ratio | 56.2 | % | 51.4 | % | 73.5 | % | 43.4 | % | 57.2 | % | (10.1) | % | 56.1 | % | ||||||||||||||||||||||||||||||
ULAE ratio | 5.0 | % | 3.8 | % | 2.9 | % | 8.4 | % | 3.8 | % | 2.4 | % | 4.4 | % | ||||||||||||||||||||||||||||||
Total Loss and LAE ratio | 61.2 | % | 55.2 | % | 76.4 | % | 51.8 | % | 61.0 | % | (7.7) | % | 60.5 | % | ||||||||||||||||||||||||||||||
Expense ratio | 33.8 | % | 35.2 | % | 40.5 | % | 47.6 | % | 44.0 | % | 39.6 | % | 38.7 | % | ||||||||||||||||||||||||||||||
Combined ratio | 95.0 | % | 90.4 | % | 116.9 | % | 99.4 | % | 105.0 | % | 31.9 | % | 99.2 | % | ||||||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||
2019 | Commercial Auto | Small Commercial Package | Middle Market Commercial | Workers' Comp | Farm & Ranch | Other Commercial | Total | |||||||||||||||||||||||||||||||||||||
Net written premiums | $ | 109.4 | $ | 122.4 | $ | 149.2 | $ | 76.7 | $ | 50.0 | $ | 18.6 | $ | 526.3 | ||||||||||||||||||||||||||||||
Net earned premiums | 91.3 | 119.2 | 134.3 | 78.2 | 48.5 | 17.1 | 488.6 | |||||||||||||||||||||||||||||||||||||
Losses and LAE incurred: | ||||||||||||||||||||||||||||||||||||||||||||
Cat loss and ALAE | 0.3 | 7.9 | 8.2 | — | 2.4 | — | 18.8 | |||||||||||||||||||||||||||||||||||||
Non-cat loss and ALAE | ||||||||||||||||||||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE | (4.7) | (15.2) | (11.8) | (20.9) | (3.0) | (3.2) | (58.8) | |||||||||||||||||||||||||||||||||||||
Current accident year non-cat loss and ALAE | 57.9 | 64.0 | 83.5 | 54.4 | 23.2 | 10.3 | 293.3 | |||||||||||||||||||||||||||||||||||||
Total non-cat loss and ALAE | 53.2 | 48.8 | 71.7 | 33.5 | 20.2 | 7.1 | 234.5 | |||||||||||||||||||||||||||||||||||||
Total Loss and ALAE | 53.5 | 56.7 | 79.9 | 33.5 | 22.6 | 7.1 | 253.3 | |||||||||||||||||||||||||||||||||||||
ULAE | 5.7 | 5.7 | 6.3 | 6.9 | 1.8 | 0.7 | 27.1 | |||||||||||||||||||||||||||||||||||||
Total Loss and LAE | 59.2 | 62.4 | 86.2 | 40.4 | 24.4 | 7.8 | 280.4 | |||||||||||||||||||||||||||||||||||||
Underwriting expenses | 43.9 | 47.2 | 59.8 | 27.2 | 22.7 | 7.6 | 208.4 | |||||||||||||||||||||||||||||||||||||
Net underwriting (loss) gain | $ | (11.8) | $ | 9.6 | $ | (11.7) | $ | 10.6 | $ | 1.4 | $ | 1.7 | $ | (0.2) | ||||||||||||||||||||||||||||||
Cat loss and ALAE ratio | 0.4 | % | 6.6 | % | 6.1 | % | — | % | 4.9 | % | — | % | 3.9 | % | ||||||||||||||||||||||||||||||
Non-cat loss and ALAE ratio | ||||||||||||||||||||||||||||||||||||||||||||
Prior accident years non-cat loss and ALAE ratio | (5.1) | % | (12.8) | % | (8.8) | % | (26.8) | % | (6.0) | % | (18.8) | % | (12.0) | % | ||||||||||||||||||||||||||||||
Current accident year non-cat loss and ALAE ratio | 63.3 | % | 53.8 | % | 62.2 | % | 69.7 | % | 47.8 | % | 60.1 | % | 60.0 | % | ||||||||||||||||||||||||||||||
Total non-cat loss and ALAE ratio | 58.2 | % | 41.0 | % | 53.4 | % | 42.9 | % | 41.8 | % | 41.3 | % | 48.0 | % | ||||||||||||||||||||||||||||||
Total Loss and ALAE ratio | 58.6 | % | 47.6 | % | 59.5 | % | 42.9 | % | 46.7 | % | 41.3 | % | 51.9 | % | ||||||||||||||||||||||||||||||
ULAE ratio | 6.2 | % | 4.8 | % | 4.7 | % | 8.8 | % | 3.7 | % | 4.1 | % | 5.5 | % | ||||||||||||||||||||||||||||||
Total Loss and LAE ratio | 64.8 | % | 52.4 | % | 64.2 | % | 51.7 | % | 50.4 | % | 45.4 | % | 57.4 | % | ||||||||||||||||||||||||||||||
Expense ratio | 40.1 | % | 38.6 | % | 40.1 | % | 35.5 | % | 45.4 | % | 40.9 | % | 39.6 | % | ||||||||||||||||||||||||||||||
Combined ratio | 104.9 | % | 91.0 | % | 104.3 | % | 87.2 | % | 95.8 | % | 86.3 | % | 97.0 | % | ||||||||||||||||||||||||||||||
($ millions) | 2020 |
%
GAAP Loss
and LAE Ratio
|
2019 |
%
GAAP Loss
and LAE Ratio
|
|||||||||||||||||||||||||||||||
Provision for losses and loss expenses occurring: | |||||||||||||||||||||||||||||||||||
Current year | $ | 1,008.2 | 73.0 | % | $ | 913.5 | 73.1 | % | |||||||||||||||||||||||||||
Prior years | (35.6) | (2.6) | % | (68.7) | (5.5) | % | |||||||||||||||||||||||||||||
Total losses and loss expenses | $ | 972.6 | 70.4 | % | $ | 844.8 | 67.6 | % | |||||||||||||||||||||||||||
($ millions) | 2020 | 2019 | ||||||||||||||||||
(Favorable)/Adverse | ||||||||||||||||||||
Non-cat loss and ALAE: | ||||||||||||||||||||
Personal Insurance Segment: | ||||||||||||||||||||
Personal Auto | $ | 20.3 | $ | (10.7) | ||||||||||||||||
Homeowners | 3.5 | 0.3 | ||||||||||||||||||
Other Personal | (2.1) | (2.1) | ||||||||||||||||||
Total Personal Insurance Segment | 21.7 | (12.5) | ||||||||||||||||||
Commercial Insurance Segment: | ||||||||||||||||||||
Commercial Auto | (1.6) | (4.7) | ||||||||||||||||||
Small Commercial Package | (23.0) | (15.2) | ||||||||||||||||||
Middle Market Commercial | (16.7) | (11.8) | ||||||||||||||||||
Workers' Compensation | (24.9) | (20.9) | ||||||||||||||||||
Farm & Ranch | (2.2) | (3.0) | ||||||||||||||||||
Other Commercial | (10.0) | (3.2) | ||||||||||||||||||
Total Commercial Insurance Segment | (78.4) | (58.8) | ||||||||||||||||||
Specialty run-off | 5.2 | (1.1) | ||||||||||||||||||
Total non-cat loss and ALAE | (51.5) | (72.4) | ||||||||||||||||||
Cat loss and ALAE: | ||||||||||||||||||||
Personal Insurance Segment | (1.1) | (4.2) | ||||||||||||||||||
Commercial Insurance Segment | 1.9 | (0.8) | ||||||||||||||||||
Specialty run-off | 12.6 | 10.7 | ||||||||||||||||||
Total cat loss and ALAE | 13.4 | 5.7 | ||||||||||||||||||
ULAE | 2.5 | (2.0) | ||||||||||||||||||
Total | $ | (35.6) | $ | (68.7) | ||||||||||||||||
($ millions)
Accident Year
|
2020 | ||||
(Favorable)/Adverse | |||||
2010 and prior | $ | (2.7) | |||
2011 | (0.5) | ||||
2012 | (2.5) | ||||
2013 | (3.8) | ||||
2014 | (2.8) | ||||
2015 | (4.6) | ||||
2016 | (2.9) | ||||
2017 | (1.1) | ||||
2018 | (12.1) | ||||
2019 | (2.6) | ||||
Total | $ | (35.6) | |||
($ millions)
Accident Year
|
2019 | ||||
(Favorable)/Adverse | |||||
2009 and prior | $ | (2.6) | |||
2010 | (1.9) | ||||
2011 | (1.6) | ||||
2012 | (2.0) | ||||
2013 | (3.5) | ||||
2014 | (4.6) | ||||
2015 | (10.8) | ||||
2016 | (5.9) | ||||
2017 | (11.9) | ||||
2018 | (23.9) | ||||
Total | $ | (68.7) | |||
($ millions) | 2020 | 2019 |
$
Change
|
||||||||||||||
Personal Insurance Segment: | |||||||||||||||||
Personal auto
|
$ | 174.4 | $ | 162.9 | $ | 11.5 | |||||||||||
Homeowners
|
90.4 | 69.2 | 21.2 | ||||||||||||||
Other Personal
|
15.8 | 15.1 | 0.7 | ||||||||||||||
Total Personal Insurance Segment
|
280.6 | 247.2 | 33.4 | ||||||||||||||
Commercial Insurance Segment: | |||||||||||||||||
Commercial Auto
|
93.8 | 76.7 | 17.1 | ||||||||||||||
Small Commercial Package
|
95.9 | 110.5 | (14.6) | ||||||||||||||
Middle Market Commercial
|
162.2 | 152.8 | 9.4 | ||||||||||||||
Workers’ Compensation
|
176.4 | 187.8 | (11.4) | ||||||||||||||
Farm & Ranch
|
18.3 | 13.3 | 5.0 | ||||||||||||||
Other Commercial
|
25.6 | 30.9 | (5.3) | ||||||||||||||
Total Commercial Insurance Segment
|
572.2 | 572.0 | 0.2 | ||||||||||||||
Specialty run-off: | |||||||||||||||||
E&S Property
|
24.3 | 27.8 | (3.5) | ||||||||||||||
E&S Casualty
|
112.2 | 145.9 | (33.7) | ||||||||||||||
Programs
|
36.8 | 60.0 | (23.2) | ||||||||||||||
Total Specialty run-off
|
173.3 | 233.7 | (60.4) | ||||||||||||||
Total losses and loss expenses payable net of reinsurance recoverable on losses and loss expenses payable | $ | 1,026.1 | $ | 1,052.9 | $ | (26.8) | |||||||||||
($ millions) | 2020 |
% of Total
|
2019 |
% of Total
|
|||||||||||||||||||
Cash and cash equivalents | $ | 90.7 | 3.2 | % | $ | 78.0 | 2.8 | % | |||||||||||||||
Fixed maturities, at fair value: | |||||||||||||||||||||||
Fixed maturities | 2,121.0 | 73.9 | % | 1,992.8 | 72.6 | % | |||||||||||||||||
Treasury inflation-protected securities | 116.2 | 4.0 | % | 135.6 | 4.9 | % | |||||||||||||||||
Total fixed maturities | 2,237.2 | 77.9 | % | 2,128.4 | 77.5 | % | |||||||||||||||||
Notes receivable from affiliate (1)
|
70.0 | 2.4 | % | 70.0 | 2.5 | % | |||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Large-cap securities | 134.2 | 4.7 | % | 104.4 | 3.8 | % | |||||||||||||||||
Mutual and exchange traded funds | 255.5 | 8.9 | % | 290.8 | 10.6 | % | |||||||||||||||||
Total equity securities | 389.7 | 13.6 | % | 395.2 | 14.4 | % | |||||||||||||||||
Other invested assets: | |||||||||||||||||||||||
International instruments | 55.8 | 2.0 | % | 56.4 | 2.1 | % | |||||||||||||||||
Other invested assets | 15.3 | 0.5 | % | 13.3 | 0.5 | % | |||||||||||||||||
Total other invested assets | 71.1 | 2.5 | % | 69.7 | 2.6 | % | |||||||||||||||||
Other invested assets, at cost | 12.1 | 0.4 | % | 6.5 | 0.2 | % | |||||||||||||||||
Total portfolio | $ | 2,870.8 | 100.0 | % | $ | 2,747.8 | 100.0 | % | |||||||||||||||
(1) In May 2019, we refinanced our two credit agreements with State Auto Mutual. Under these credit agreements, State Auto Mutual borrowed $70.0 million from us on an unsecured basis at an interest rate of 4.05%, with principal payable in May 2029.
|
($ millions) |
Amortized
Cost
|
Fair
Value
|
|||||||||
Due in 1 year or less | $ | 140.5 | $ | 141.6 | |||||||
Due after 1 year through 5 years | 510.3 | 540.4 | |||||||||
Due after 5 years through 10 years | 161.6 | 172.6 | |||||||||
Due after 10 years | 665.3 | 721.9 | |||||||||
U.S. government agencies residential mortgage-backed securities | 639.3 | 660.7 | |||||||||
Total | $ | 2,117.0 | $ | 2,237.2 | |||||||
($ 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 | $ | 598.1 | $ | 577.9 | $ | 551.7 | $ | 517.3 | $ | 483.1 | |||||||||||||||||||
Obligations of states and political subdivisions | 575.5 | 564.9 | 541.5 | 515.2 | 488.9 | ||||||||||||||||||||||||
Corporate securities | 501.1 | 496.5 | 483.3 | 467.2 | 451.0 | ||||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 704.4 | 688.0 | 660.7 | 632.6 | 604.5 | ||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | 2,379.1 | $ | 2,327.3 | $ | 2,237.2 | $ | 2,132.3 | $ | 2,027.5 | |||||||||||||||||||
Large-cap equity portfolio: | ||||||||||||||||||||||||||||||||
Fair value ($ millions) | $ | 161.6 | $ | 147.9 | $ | 134.2 | $ | 120.5 | $ | 106.8 | ||||||||||||||||||||||
Change in S&P 500 Index | +20% | +10% | — | -10 | % | -20 | % | |||||||||||||||||||||||||
Value as % of original value | 120 | % | 110 | % | 100 | % | 90 | % | 80 | % | ||||||||||||||||||||||
Mutual fund and ETF portfolio: | ||||||||||||||||||||||||||||||||
Fair value ($ millions) | $ | 306.6 | $ | 281.1 | $ | 255.5 | $ | 230.0 | $ | 204.4 | ||||||||||||||||||||||
Change in Index | +20% | +10% | — | -10 | % | -20 | % | |||||||||||||||||||||||||
Value as % of original value | 120 | % | 110 | % | 100 | % | 90 | % | 80 | % |
International fund: | ||||||||||||||||||||||||||||||||
Fair value ($ millions)
|
$ | 64.1 | $ | 60.0 | $ | 55.8 | $ | 51.7 | $ | 47.6 | ||||||||||||||||||||||
Change in MSCI EAFE Index | +20% | +10% | — | -10 | % | -20 | % | |||||||||||||||||||||||||
Value as % of original value | 115 | % | 108 | % | 100 | % | 93 | % | 85 | % | ||||||||||||||||||||||
($ millions) | Year Ended December 31 | ||||||||||||||||
|
2020 | 2019 | |||||||||||||||
Gross investment income: | |||||||||||||||||
Fixed maturities | $ | 59.6 | $ | 62.3 | |||||||||||||
Equity securities | 9.3 | 13.2 | |||||||||||||||
Other | 4.0 | 5.5 | |||||||||||||||
Total gross investment income | 72.9 | 81.0 | |||||||||||||||
Less: Investment expenses | 0.8 | 0.6 | |||||||||||||||
Net investment income | $ | 72.1 | $ | 80.4 | |||||||||||||
Average invested assets (at cost) | $ | 2,531.5 | $ | 2,635.4 | |||||||||||||
Annualized investment yield | 2.8 | % | 3.0 | % | |||||||||||||
Annualized investment yield, after tax | 2.3 | % | 2.5 | % | |||||||||||||
Net investment income, after tax | $ | 59.3 | $ | 65.7 | |||||||||||||
Effective tax rate | 17.7 | % | 18.2 | % | |||||||||||||
($ millions, except number of positions)
|
Cost or
amortized
cost
|
Gross
unrealized
holding
gains
|
Gross
unrealized
holding
losses
|
Fair
value
|
|||||||||||||||||||||||||||||||
Available-for-sale fixed maturities: | |||||||||||||||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 506.5 | $ | 45.2 | $ | — | $ | 551.7 | |||||||||||||||||||||||||||
Obligations of states and political subdivisions | 511.3 | 30.4 | (0.2) | 541.5 | |||||||||||||||||||||||||||||||
Corporate securities | 459.9 | 23.4 | — | 483.3 | |||||||||||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 639.3 | 22.9 | (1.5) | 660.7 | |||||||||||||||||||||||||||||||
Total available-for-sale fixed maturities | $ | 2,117.0 | $ | 121.9 | $ | (1.7) | $ | 2,237.2 | |||||||||||||||||||||||||||
($ millions) | 2020 | 2019 |
$ Change
|
||||||||||||||
Available-for-sale investments | |||||||||||||||||
Unrealized holding gains (losses):
|
|||||||||||||||||
Fixed maturities | $ | 120.2 | $ | 48.4 | $ | 71.8 | |||||||||||
Net deferred federal income tax | (25.3) | (10.2) | (15.1) | ||||||||||||||
Unrealized gains (losses), net of tax
|
$ | 94.9 | $ | 38.2 | $ | 56.7 | |||||||||||
($ millions) |
Carrying
Value
|
Fair
Value
|
Interest
Rate
|
||||||||||||||
FHLB loan due 2030: issued $21.5 million , September 2020 with fixed interest | 21.5 | 21.6 | 1.37 | % | |||||||||||||
FHLB loan due 2033: issued $85.0 million, May 2018 with fixed interest | 85.3 | 107.1 | 3.96 | % | |||||||||||||
Subordinated Debentures due 2033: issued $15.5 million, May 2003 with variable interest adjusting quarterly | $ | 15.3 | $ | 15.3 | 4.43 | % | |||||||||||
Total notes payable | $ | 122.1 | $ | 144.0 | |||||||||||||
($ 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)
|
$ | 1,025.2 | $ | 469.0 | $ | 360.0 | $ | 110.4 | $ | 85.8 | |||||||||||||||||||||||||
Notes payable(2):
|
|||||||||||||||||||||||||||||||||||
FHLB loan due 2033; issued $85.0 million, May 2018 with fixed interest | 85.0 | — | — | — | 85.0 | ||||||||||||||||||||||||||||||
FHLB loan due 2030: issued $21.5 million, September 2020 with fixed interest | 21.5 | — | — | — | 21.5 | ||||||||||||||||||||||||||||||
Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest(3) adjusting quarterly
|
15.5 | — | — | — | 15.5 | ||||||||||||||||||||||||||||||
Total notes payable | 122.0 | — | — | — | 122.0 | ||||||||||||||||||||||||||||||
Interest payable (2):
|
|||||||||||||||||||||||||||||||||||
FHLB loan due 2033; issued $85.0 million, May 2018 with fixed interest | 45.4 | 3.4 | 6.7 | 6.7 | 28.6 | ||||||||||||||||||||||||||||||
FHLB loan due 2030: issued $21.5 million, September 2020 with fixed interest | 3.1 | 0.3 | 0.6 | 0.6 | 1.6 | ||||||||||||||||||||||||||||||
Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest(3) adjusting quarterly
|
9.3 | 0.7 | 1.4 | 1.4 | 5.8 | ||||||||||||||||||||||||||||||
Total interest payable | 57.8 | 4.4 | 8.7 | 8.7 | 36.0 | ||||||||||||||||||||||||||||||
Postretirement benefits | 6.2 | 0.7 | 1.2 | 1.2 | 3.1 | ||||||||||||||||||||||||||||||
Pension funding(4)
|
63.6 | 6.4 | 13.5 | 13.2 | 30.5 | ||||||||||||||||||||||||||||||
Total | $ | 1,274.8 | $ | 480.5 | $ | 383.4 | $ | 133.5 | $ | 277.4 | |||||||||||||||||||||||||
(1) | Gross of the allowance for credit losses on reinsurance recoverables of $0.9 million. 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. Under the current Pooling Arrangement, STFC will recover 35% of these payments. 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, 2020, 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, 2020 of 0.2254% plus 4.20%, or 4.4254%. | ||||||||||||||||||||||||||||||||||
(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 12, “Pension and Postretirement Benefits Plans” to our consolidated financial statements included in Item 8 of this Form 10-K for a tabular presentation of expected benefit payments from the State Auto Group’s defined benefit pension plan. | ||||||||||||||||||||||||||||||||||
Statutory Leverage Ratios | 2020 | 2019 | |||||||||||||||
State Auto P&C
|
1.6 | 1.5 | |||||||||||||||
Milbank
|
1.6 | 1.5 | |||||||||||||||
Weighted Average | 1.6 | 1.5 | |||||||||||||||
($ millions) | 2020 | 2019 | |||||||||
Direct loss and ALAE reserve:
|
|||||||||||
STFC Pooled Companies | $ | 577.2 | $ | 534.3 | |||||||
Assumed by STFC Pooled Companies | 481.5 | 537.8 | |||||||||
Total direct loss and ALAE reserve | 1,058.7 | 1,072.1 | |||||||||
Direct ULAE reserve: | |||||||||||
STFC Pooled Companies | 30.6 | 29.0 | |||||||||
Assumed by STFC Pooled Companies | 25.4 | 28.2 | |||||||||
Total direct ULAE reserve | 56.0 | 57.2 | |||||||||
Direct salvage and subrogation recoverable:
|
|||||||||||
STFC Pooled Companies | (26.5) | (23.2) | |||||||||
Assumed by STFC Pooled Companies | (0.4) | (3.3) | |||||||||
Total direct salvage and subrogation recoverable | (26.9) | (26.4) | |||||||||
Reinsurance recoverable | (24.3) | (13.6) | |||||||||
Assumed reinsurance | 5.4 | 6.4 | |||||||||
Reinsurance assumed by STFC Pooled Companies | (42.8) | (42.8) | |||||||||
Total losses and loss expenses payable, net of reinsurance recoverable on losses and loss expenses payable of $24.3 million and $13.6 million in 2020 and 2019, respectively | $ | 1,026.1 | $ | 1,052.9 | |||||||
($ millions) | |||||||||||||||||||||||
December 31, 2019 |
Ending Loss & ALAE Case & Formula
|
Ending Loss & ALAE IBNR
|
Ending ULAE Bulk
|
Total Reserves
|
|||||||||||||||||||
Personal Insurance Segment: | |||||||||||||||||||||||
Personal Auto | $ | 112.1 | $ | 43.7 | $ | 7.1 | $ | 162.9 | |||||||||||||||
Homeowners | 36.7 | 28.1 | 4.4 | 69.2 | |||||||||||||||||||
Other personal | 5.4 | 9.0 | 0.7 | 15.1 | |||||||||||||||||||
Total Personal Insurance Segment | 154.2 | 80.8 | 12.2 | 247.2 | |||||||||||||||||||
Commercial Insurance Segment: | |||||||||||||||||||||||
Commercial Auto | 46.3 | 27.6 | 2.8 | 76.7 | |||||||||||||||||||
Small Commercial Package | 41.1 | 64.1 | 5.3 | 110.5 | |||||||||||||||||||
Middle Market Commercial | 62.4 | 76.5 | 13.9 | 152.8 | |||||||||||||||||||
Workers’ Compensation | 67.6 | 106.6 | 13.6 | 187.8 | |||||||||||||||||||
Farm & Ranch | 8.4 | 4.4 | 0.5 | 13.3 | |||||||||||||||||||
Other Commercial | 2.5 | 28.4 | — | 30.9 | |||||||||||||||||||
Total Commercial Insurance Segment | 228.3 | 307.6 | 36.1 | 572.0 | |||||||||||||||||||
Specialty run-off: | |||||||||||||||||||||||
E&S Property | 14.9 | 12.2 | 0.7 | 27.8 | |||||||||||||||||||
E&S Casualty | 44.4 | 94.7 | 6.8 | 145.9 | |||||||||||||||||||
Programs | 34.8 | 23.0 | 2.2 | 60.0 | |||||||||||||||||||
Total Specialty run-off | 94.1 | 129.9 | 9.7 | 233.7 | |||||||||||||||||||
Total losses and loss expenses payable net of reinsurance recoverable on losses and loss expenses payable | $ | 476.6 | $ | 518.3 | $ | 58.0 | $ | 1,052.9 | |||||||||||||||
($ millions) | Pension | Postretirement | |||||||||||||||||||||||||||||||||
Discount rate | Discount rate | ||||||||||||||||||||||||||||||||||
2.07% | 2.32% | 2.57% | 1.70% | 1.95% | 2.20% | ||||||||||||||||||||||||||||||
Benefit obligation | $ | 570.9 | 549.6 | 529.4 | $ | 10.4 | 10.2 | 10.0 | |||||||||||||||||||||||||||
Net periodic benefit cost (benefit) | $ | 7.6 | 6.5 | 5.5 | $ | (5.6) | (5.6) | (5.6) | |||||||||||||||||||||||||||
Expected return on plan assets | |||||||||||||||||||||||||||||||||||
6.00% | 6.25% | 6.50% | |||||||||||||||||||||||||||||||||
Net periodic benefit cost | $ | 7.2 | 6.5 | 5.8 |
/s/ PricewaterhouseCoopers LLP | ||||||||
Columbus, Ohio | ||||||||
March 10, 2021 | ||||||||
We have served as the Company’s auditor since 2019. |
/s/ Ernst & Young LLP | ||||||||
We served as the Company’s auditor from 1994 to 2020 | ||||||||
Grandview Heights, Ohio | ||||||||
February 27, 2020 | ||||||||
except for Note 2, as to which the date is | ||||||||
March 10, 2021 |
($ and shares in millions, except per share amounts) | December 31 | ||||||||||
2020 | 2019 | ||||||||||
Assets | |||||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost $2,117.0 and $2,080.0, respectively) | $ | 2,237.2 | $ | 2,128.4 | |||||||
Equity securities | 389.7 | 395.2 | |||||||||
Other invested assets | 71.1 | 69.7 | |||||||||
Other invested assets, at cost | 12.1 | 6.5 | |||||||||
Notes receivable from affiliate | 70.0 | 70.0 | |||||||||
Total investments | 2,780.1 | 2,669.8 | |||||||||
Cash and cash equivalents | 90.7 | 78.0 | |||||||||
Accrued investment income and other assets | 29.7 | 31.7 | |||||||||
Premiums receivable | 14.0 | 13.6 | |||||||||
Deferred policy acquisition costs (affiliated net assumed $30.1 and $20.2, respectively) | 122.2 | 111.1 | |||||||||
Reinsurance recoverable on losses and loss expenses payable | 24.3 | 13.6 | |||||||||
Prepaid reinsurance premiums | 8.3 | 7.5 | |||||||||
Due from affiliate | — | 4.1 | |||||||||
Current federal income taxes | 1.7 | 6.3 | |||||||||
Net deferred federal income taxes | 27.3 | 39.7 | |||||||||
Property and equipment, at cost (net of accumulated depreciation of $3.5 and $5.9, respectively) | 4.2 | 4.2 | |||||||||
Total assets | $ | 3,102.5 | $ | 2,979.6 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||
Losses and loss expenses payable (affiliated net assumed $438.8 and $500.8, respectively) | $ | 1,050.4 | $ | 1,066.5 | |||||||
Unearned premiums (affiliated net assumed $452.4 and $415.8, respectively) | 723.4 | 649.2 | |||||||||
Notes payable (affiliates $15.3 and $15.2, respectively) | 122.1 | 122.0 | |||||||||
Pension and postretirement benefits | 66.2 | 59.5 | |||||||||
Due to affiliate | 11.2 | — | |||||||||
Other liabilities (affiliated net assumed $22.4 and $16.1, respectively) | 119.2 | 114.9 | |||||||||
Total liabilities | 2,092.5 | 2,012.1 | |||||||||
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; 50.7 and 50.4 shares issued, respectively, at stated value of $2.50 per share | 126.8 | 125.9 | |||||||||
Treasury stock, 6.9 and 6.9 shares, respectively, at cost | (118.4) | (117.5) | |||||||||
Additional paid-in capital | 213.3 | 206.7 | |||||||||
Accumulated other comprehensive income (loss) | 13.9 | (26.9) | |||||||||
Retained earnings | 774.4 | 779.3 | |||||||||
Total stockholders’ equity | 1,010.0 | 967.5 | |||||||||
Total liabilities and stockholders’ equity | $ | 3,102.5 | $ | 2,979.6 | |||||||
($ millions, except per share amounts) | Year ended December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Earned premiums (affiliated net assumed $267.5, $222.5, and $318.6, respectively) | $ | 1,380.9 | $ | 1,250.2 | $ | 1,237.6 | |||||||||||
Net investment income (affiliates $2.8, $3.6, and $4.9, respectively) | 72.1 | 80.4 | 84.9 | ||||||||||||||
Net investment gain (loss) | 27.3 | 74.2 | (49.7) | ||||||||||||||
Other income from affiliates | 2.1 | 2.4 | 2.6 | ||||||||||||||
Total revenues | 1,482.4 | 1,407.2 | 1,275.4 | ||||||||||||||
Losses and loss expenses (affiliated net assumed $184.2, $169.3, and $180.5, respectively) | 972.6 | 844.8 | 796.4 | ||||||||||||||
Acquisition and operating expenses (affiliated net assumed $102.6, $69.1, and $108.7, respectively) | 481.4 | 440.7 | 450.2 | ||||||||||||||
Interest expense (affiliates $0.8, $1.1, and $1.0, respectively) | 4.7 | 4.9 | 5.7 | ||||||||||||||
Other expenses | 9.3 | 11.3 | 11.0 | ||||||||||||||
Total expenses | 1,468.0 | 1,301.7 | 1,263.3 | ||||||||||||||
Income before federal income taxes | 14.4 | 105.5 | 12.1 | ||||||||||||||
Federal income tax expense (benefit) | |||||||||||||||||
Current | (0.3) | (0.4) | (1.1) | ||||||||||||||
Deferred | 1.6 | 20.1 | 1.0 | ||||||||||||||
Total federal income tax expense (benefit) | 1.3 | 19.7 | (0.1) | ||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.30 | $ | 1.98 | $ | 0.29 | |||||||||||
Diluted | $ | 0.30 | $ | 1.93 | $ | 0.28 | |||||||||||
($ millions) | Year ended December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||
Net change in unrealized holding gain (loss) on available-for-sale investments: | |||||||||||||||||
Unrealized holding gains (losses) arising during year | 71.5 | 80.7 | (46.4) | ||||||||||||||
Reclassification adjustments for losses (gains) realized in net income | 0.3 | (3.5) | (2.0) | ||||||||||||||
Income tax (expense) benefit | (15.1) | (16.2) | 10.1 | ||||||||||||||
Total change in net unrealized holding gain (loss) on available-for-sale investments | 56.7 | 61.0 | (38.3) | ||||||||||||||
Net unrecognized benefit plan obligations: | |||||||||||||||||
Net actuarial (loss) gain arising during period | (27.4) | 7.5 | (4.3) | ||||||||||||||
Reclassification adjustments for amortization to statements of income: | |||||||||||||||||
Negative prior service cost | (6.3) | (6.3) | (6.3) | ||||||||||||||
Net actuarial gain | 13.7 | 9.6 | 13.2 | ||||||||||||||
Income tax benefit (expense) | 4.1 | (2.3) | (0.6) | ||||||||||||||
Total net unrecognized benefit plan obligations | (15.9) | 8.5 | 2.0 | ||||||||||||||
Other comprehensive income (loss) | 40.8 | 69.5 | (36.3) | ||||||||||||||
Comprehensive income (loss) | $ | 53.9 | $ | 155.3 | $ | (24.1) | |||||||||||
(in millions) | Year ended December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Common shares: | |||||||||||||||||
Balance at beginning of year | 50.4 | 50.0 | 49.2 | ||||||||||||||
Issuance of shares | 0.3 | 0.4 | 0.8 | ||||||||||||||
Balance at end of year | 50.7 | 50.4 | 50.0 | ||||||||||||||
Treasury shares: | |||||||||||||||||
Balance at beginning of year | (6.9) | (6.8) | (6.8) | ||||||||||||||
Issuance of shares | — | (0.1) | — | ||||||||||||||
Balance at end of year | (6.9) | (6.9) | (6.8) | ||||||||||||||
Common stock: | |||||||||||||||||
Balance at beginning of year | $ | 125.9 | $ | 125.0 | $ | 123.0 | |||||||||||
Issuance of shares | 0.9 | 0.9 | 2.0 | ||||||||||||||
Balance at end of year | $ | 126.8 | $ | 125.9 | $ | 125.0 | |||||||||||
Treasury stock: | |||||||||||||||||
Balance at beginning of year | $ | (117.5) | $ | (117.0) | $ | (116.8) | |||||||||||
Shares acquired on stock award exercises and vested restricted shares | (0.9) | (0.5) | (0.2) | ||||||||||||||
Balance at end of year | $ | (118.4) | $ | (117.5) | $ | (117.0) | |||||||||||
Additional paid-in capital: | |||||||||||||||||
Balance at beginning of year | $ | 206.7 | $ | 194.2 | $ | 171.8 | |||||||||||
Issuance of common stock | 3.0 | 5.1 | 13.3 | ||||||||||||||
Stock awards granted | 3.6 | 7.4 | 9.1 | ||||||||||||||
Balance at end of year | $ | 213.3 | $ | 206.7 | $ | 194.2 | |||||||||||
Accumulated other comprehensive (loss) income: | |||||||||||||||||
Balance at beginning of year | $ | (26.9) | $ | (96.4) | $ | 3.8 | |||||||||||
Cumulative effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018 | — | — | (63.9) | ||||||||||||||
Change in unrealized holding gain (loss) on investments, net of tax | 56.7 | 61.0 | (38.3) | ||||||||||||||
Change in unrecognized benefit plan obligations, net of tax | (15.9) | 8.5 | 2.0 | ||||||||||||||
Balance at end of year | $ | 13.9 | $ | (26.9) | $ | (96.4) | |||||||||||
Retained earnings: | |||||||||||||||||
Balance at beginning of year | $ | 779.3 | $ | 710.9 | $ | 652.0 | |||||||||||
Cumulative effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018 | — | — | 63.9 | ||||||||||||||
Cumulative effect of change in accounting to establish an allowance for expected credit losses at January 1, 2020 | (0.5) | — | — | ||||||||||||||
Net income | 13.1 | 85.8 | 12.2 | ||||||||||||||
Dividends declared (affiliates $10.4, $10.4 and $10.4, respectively) | (17.5) | (17.4) | (17.2) | ||||||||||||||
Balance at end of year | $ | 774.4 | $ | 779.3 | $ | 710.9 | |||||||||||
Total stockholders’ equity at end of year | $ | 1,010.0 | $ | 967.5 | $ | 816.7 | |||||||||||
($ millions) | Year ended December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||||
Depreciation and amortization, net | 10.6 | 9.4 | 8.9 | ||||||||||||||
Share-based compensation | 0.9 | 6.1 | 11.1 | ||||||||||||||
Net investment (gain) loss | (27.3) | (74.2) | 49.7 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Deferred policy acquisition benefits | (11.1) | (9.2) | 8.4 | ||||||||||||||
Accrued investment income and other assets | 2.0 | 0.7 | 3.9 | ||||||||||||||
Premiums receivables | (0.4) | (0.9) | (2.7) | ||||||||||||||
Postretirement and pension benefits | (16.9) | (14.5) | (16.9) | ||||||||||||||
Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums | (11.5) | (9.0) | (2.6) | ||||||||||||||
Other liabilities and due to/from affiliates, net | 25.8 | (42.5) | 51.1 | ||||||||||||||
Losses and loss expenses payable | (16.6) | (80.3) | (108.8) | ||||||||||||||
Unearned premiums | 74.2 | 65.0 | (27.6) | ||||||||||||||
Deferred tax expense on share-based awards | — | (0.9) | 0.9 | ||||||||||||||
Federal income taxes | 6.2 | 20.6 | (1.0) | ||||||||||||||
Net cash provided by (used in) operating activities | $ | 49.0 | $ | (43.9) | $ | (13.4) | |||||||||||
Cash flows from investing activities: | |||||||||||||||||
Purchases of fixed maturities available-for-sale | $ | (661.0) | $ | (592.6) | $ | (349.6) | |||||||||||
Purchases of equity securities | (88.9) | (63.4) | (91.4) | ||||||||||||||
Purchases of other invested assets | (7.6) | (13.3) | (1.8) | ||||||||||||||
Maturities, calls and pay downs of fixed maturities available-for-sale | 384.1 | 386.3 | 229.8 | ||||||||||||||
Sales of fixed maturities available-for-sale | 229.0 | 308.8 | 98.0 | ||||||||||||||
Sales of equity securities | 121.1 | 45.4 | 97.8 | ||||||||||||||
Sales of other invested assets | 1.3 | 1.3 | 1.2 | ||||||||||||||
Net disposals of property and equipment | 0.2 | 1.6 | — | ||||||||||||||
Net cash (used in) provided by investing activities | $ | (21.8) | $ | 74.1 | $ | (16.0) | |||||||||||
Cash flows from financing activities: | |||||||||||||||||
Proceeds from issuance of common stock | $ | 3.9 | $ | 5.9 | $ | 15.4 | |||||||||||
Payments to acquire treasury stock | (0.9) | (0.5) | (0.2) | ||||||||||||||
Payments of dividends (affiliates $10.4, $10.4 and $10.4, respectively) | (17.5) | (17.4) | (17.1) | ||||||||||||||
Payment of prepayment fee | — | — | (0.4) | ||||||||||||||
Proceeds from short-term debt | 60.0 | — | — | ||||||||||||||
Repayment of short-term debt | (60.0) | — | — | ||||||||||||||
Proceeds from long-term debt | 21.5 | — | — | ||||||||||||||
Repayment of long-term debt | (21.5) | — | — | ||||||||||||||
Net cash used in financing activities | $ | (14.5) | $ | (12.0) | $ | (2.3) | |||||||||||
Net increase (decrease) in cash and cash equivalents | 12.7 | 18.2 | (31.7) | ||||||||||||||
Cash and cash equivalents at beginning of year | 78.0 | 59.8 | 91.5 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 90.7 | $ | 78.0 | $ | 59.8 | |||||||||||
Supplemental disclosures: | |||||||||||||||||
Interest paid (affiliates $0.8, $1.1, and $1.0, respectively) | $ | 4.7 | $ | 4.8 | $ | 5.7 | |||||||||||
Federal income tax refund | $ | 4.9 | $ | — | $ | — | |||||||||||
($ millions) | 2020 | 2019 | 2018 | |||||||||||||||||
Balance, beginning of year | $ | 111.1 | $ | 101.9 | $ | 110.3 | ||||||||||||||
Acquisition costs deferred
|
247.7 | 225.7 | 211.6 | |||||||||||||||||
Acquisition costs amortized to expense
|
(236.6) | (216.5) | (220.0) | |||||||||||||||||
Balance, end of year | $ | 122.2 | $ | 111.1 | $ | 101.9 | ||||||||||||||
Revised Consolidated Balance Sheet | |||||||||||
($ in millions) | Year Ended December 31, 2019 | ||||||||||
As Reported | Adjustment | As Revised | |||||||||
Assets | |||||||||||
Fixed maturities, available-for-sale, at fair value | $ | 2,127.9 | $ | 0.5 | $ | 2,128.4 | |||||
Premiums receivable | — | 13.6 | 13.6 | ||||||||
Due from affiliate | 21.5 | (17.4) | 4.1 | ||||||||
Net deferred federal income taxes | 42.2 | (2.5) | 39.7 | ||||||||
Total Assets | 2,985.4 | (5.8) | 2,979.6 | ||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Pension and postretirement benefits | 72.9 | (13.4) | 59.5 | ||||||||
Total liabilities | 2,025.5 | (13.4) | 2,012.1 | ||||||||
Stockholders’ equity: | |||||||||||
Accumulated other comprehensive income (loss) | (37.9) | 11.0 | (26.9) | ||||||||
Retained earnings | 782.7 | (3.4) | 779.3 | ||||||||
Total stockholders’ equity | 959.9 | 7.6 | 967.5 | ||||||||
Total liabilities and stockholders’ equity | 2,985.4 | (5.8) | 2,979.6 | ||||||||
Revised Consolidated Statement of Income
|
||||||||||||||||||||
($ in millions, except per share amounts) | Year Ended December 31, 2019 | Year Ended December 31, 2018 | ||||||||||||||||||
As Reported | Adjustment | As Revised | As Reported | Adjustment | As Revised | |||||||||||||||
Earned premiums | $ | 1,253.0 | $ | (2.8) | $ | 1,250.2 | $ | 1,238.0 | $ | (0.4) | $ | 1,237.6 | ||||||||
Total revenues | 1,410.0 | (2.8) | 1,407.2 | 1,275.8 | (0.4) | 1,275.4 | ||||||||||||||
Acquisition and operating expenses | 442.0 | (1.3) | 440.7 | 449.8 | 0.4 | 450.2 | ||||||||||||||
Total expenses | 1,303.0 | (1.3) | 1,301.7 | 1,262.9 | 0.4 | 1,263.3 | ||||||||||||||
Income before federal income taxes | 107.0 | (1.5) | 105.5 | 12.9 | (0.8) | 12.1 | ||||||||||||||
Deferred income tax expense (benefit) | 20.0 | 0.1 | 20.1 | 1.2 | (0.2) | 1.0 | ||||||||||||||
Total federal income tax expense (benefit) | 19.6 | 0.1 | 19.7 | 0.1 | (0.2) | (0.1) | ||||||||||||||
Net income | 87.4 | (1.6) | 85.8 | 12.8 | (0.6) | 12.2 | ||||||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 2.01 | $ | (0.03) | $ | 1.98 | $ | 0.30 | $ | (0.01) | $ | 0.29 | ||||||||
Diluted | $ | 1.96 | $ | (0.03) | $ | 1.93 | $ | 0.29 | $ | (0.01) | $ | 0.28 | ||||||||
Revised Consolidated Statement of Comprehensive Income
|
|||||||||||
($ millions) | Year Ended December 31, 2019 | ||||||||||
As Reported | Adjustment | As Revised | |||||||||
Net income | $ | 87.4 | $ | (1.6) | $ | 85.8 | |||||
Other comprehensive income, net of tax: | |||||||||||
Net change in unrealized holding gain on available-for-sale investments: | |||||||||||
Unrealized holding gains arising during year | 80.2 | 0.5 | 80.7 | ||||||||
Income tax expense | (16.1) | (0.1) | (16.2) | ||||||||
Total change in net unrealized holding gain on available-for-sale investments | 60.6 | 0.4 | 61.0 | ||||||||
Net unrecognized benefit plan obligations: | |||||||||||
Net actuarial gain (loss) arising during period | (5.9) | 13.4 | 7.5 | ||||||||
Income tax benefit (expense) | 0.5 | (2.8) | (2.3) | ||||||||
Total net unrecognized benefit plan obligations | (2.1) | 10.6 | 8.5 | ||||||||
Other comprehensive income | 58.5 | 11.0 | 69.5 | ||||||||
Comprehensive income | 145.9 | 9.4 | 155.3 | ||||||||
Revised Consolidated Statement of Cash Flows | ||||||||||||||||||||
($ in millions) | Year ended December 31, 2019 | Year ended December 31, 2018 | ||||||||||||||||||
As Reported | Adjustment | As Revised | As Reported | Adjustment | As Revised | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income | $ | 87.4 | $ | (1.6) | $ | 85.8 | $ | 12.8 | $ | (0.6) | $ | 12.2 | ||||||||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Premiums receivable | — | (0.9) | (0.9) | — | (2.7) | (2.7) | ||||||||||||||
Other liabilities and due to/from affiliates, net | (44.9) | 2.4 | (42.5) | 47.6 | 3.5 | 51.1 | ||||||||||||||
Federal income taxes | 20.5 | 0.1 | 20.6 | (0.8) | (0.2) | (1.0) | ||||||||||||||
Net cash used in operating activities | (43.9) | — | (43.9) | (13.4) | — | (13.4) | ||||||||||||||
($ millions) |
Cost or
amortized
cost
|
Gross
unrealized
holding
gains
|
Gross
unrealized
holding
losses
|
Fair
value
|
||||||||||||||||||||||
December 31, 2020 | ||||||||||||||||||||||||||
Available-for-sale fixed maturities: | ||||||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 506.5 | $ | 45.2 | $ | — | $ | 551.7 | ||||||||||||||||||
Obligations of states and political subdivisions | 511.3 | 30.4 | (0.2) | 541.5 | ||||||||||||||||||||||
Corporate securities | 459.9 | 23.4 | — | 483.3 | ||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 639.3 | 22.9 | (1.5) | 660.7 | ||||||||||||||||||||||
Total available-for-sale fixed maturities | $ | 2,117.0 | $ | 121.9 | $ | (1.7) | $ | 2,237.2 | ||||||||||||||||||
($ millions) |
Cost or
amortized
cost
|
Gross
unrealized
holding
gains
|
Gross
unrealized
holding
losses
|
Fair
value
|
||||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Available-for-sale fixed maturities: | ||||||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 569.2 | $ | 12.6 | $ | (3.3) | $ | 578.5 | ||||||||||||||||||
Obligations of states and political subdivisions | 404.3 | 21.1 | — | 425.4 | ||||||||||||||||||||||
Corporate securities | 460.5 | 11.7 | (0.4) | 471.8 | ||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 646.0 | 11.3 | (4.6) | 652.7 | ||||||||||||||||||||||
Total available-for-sale fixed maturities | $ | 2,080.0 | $ | 56.7 | $ | (8.3) | $ | 2,128.4 | ||||||||||||||||||
($ millions, except # of positions) | Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2020 |
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 | $ | 9.6 | $ | — | 4 | $ | — | $ | — | — | $ | 9.6 | $ | — | 4 | ||||||||||||||||||||||||||||||||||||||
Obligations of states and political subdivisions | 19.5 | (0.2) | 5 | — | — | — | 19.5 | (0.2) | 5 | ||||||||||||||||||||||||||||||||||||||||||||
Corporate securities | 1.5 | — | 2 | — | — | — | 1.5 | — | 2 | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 136.1 | (1.4) | 35 | 7.0 | (0.1) | 3 | 143.1 | (1.5) | 38 | ||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 166.7 | $ | (1.6) | 46 | $ | 7.0 | $ | (0.1) | 3 | $ | 173.7 | $ | (1.7) | 49 | ||||||||||||||||||||||||||||||||||||||
($ millions, except # of positions) | Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
December 31, 2019 |
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 | $ | 136.0 | $ | (2.5) | 17 | $ | 157.6 | $ | (0.8) | 11 | $ | 293.6 | $ | (3.3) | 28 | ||||||||||||||||||||||||||||||||||||||
Corporate securities | — | — | — | 40.8 | (0.4) | 7 | 40.8 | (0.4) | 7 | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 126.6 | (1.5) | 15 | 137.9 | (3.1) | 32 | 264.5 | (4.6) | 47 | ||||||||||||||||||||||||||||||||||||||||||||
Total fixed maturities | $ | 262.6 | $ | (4.0) | 32 | $ | 336.3 | $ | (4.3) | 50 | $ | 598.9 | $ | (8.3) | 82 | ||||||||||||||||||||||||||||||||||||||
($ millions) |
Amortized
cost
|
Fair
value
|
|||||||||
Due in 1 year or less | $ | 140.5 | $ | 141.6 | |||||||
Due after 1 year through 5 years | 510.3 | 540.4 | |||||||||
Due after 5 years through 10 years | 161.6 | 172.6 | |||||||||
Due after 10 years | 665.3 | 721.9 | |||||||||
U.S. government agencies mortgage-backed securities | 639.3 | 660.7 | |||||||||
Total | $ | 2,117.0 | $ | 2,237.2 | |||||||
($ millions) | 2020 | 2019 | 2018 | ||||||||||||||
Fixed maturities | $ | 59.6 | $ | 62.3 | $ | 65.3 | |||||||||||
Equity securities | 9.3 | 13.2 | 13.4 | ||||||||||||||
Cash and cash equivalents, and other | 4.0 | 5.5 | 7.2 | ||||||||||||||
Investment income | 72.9 | 81.0 | 85.9 | ||||||||||||||
Investment expenses | 0.8 | 0.6 | 1.0 | ||||||||||||||
Net investment income | $ | 72.1 | $ | 80.4 | $ | 84.9 | |||||||||||
($ millions) | 2020 | 2019 | 2018 | ||||||||||||||
Investment gain (loss), net: | |||||||||||||||||
Fixed maturities: | |||||||||||||||||
Realized gains on securities sold | $ | 5.2 | $ | 3.5 | $ | 2.0 | |||||||||||
Realized losses on securities sold | (5.5) | — | — | ||||||||||||||
Net (loss) gain on fixed maturities | (0.3) | 3.5 | 2.0 | ||||||||||||||
Net gain (loss) on equity securities | 26.7 | 62.1 | (44.0) | ||||||||||||||
Net gain (loss) on other invested assets | 0.7 | 9.9 | (7.7) | ||||||||||||||
Other net realized gain (loss) | 0.2 | (1.3) | — | ||||||||||||||
Net gain (loss) on investments | $ | 27.3 | $ | 74.2 | $ | (49.7) | |||||||||||
Change in net unrealized holding gains (losses), net of tax | |||||||||||||||||
Fixed maturities | $ | 71.8 | $ | 77.2 | $ | (48.4) | |||||||||||
Deferred federal income tax (liability) benefit | (15.1) | (16.2) | 10.1 | ||||||||||||||
Change in net unrealized holding gains (losses), net of tax | $ | 56.7 | $ | 61.0 | $ | (38.3) | |||||||||||
($ millions) | Total |
Quoted prices
in active
markets for
identical
assets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||
Available-for-sale fixed maturities: | |||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 551.7 | $ | — | $ | 551.7 | |||||||||||||||||
Obligations of states and political subdivisions | 541.5 | — | 541.5 | ||||||||||||||||||||
Corporate securities | 483.3 | — | 483.3 | ||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 660.7 | — | 660.7 | ||||||||||||||||||||
Total available-for-sale fixed maturities | 2,237.2 | — | 2,237.2 | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Large-cap securities | 134.2 | 134.2 | — | ||||||||||||||||||||
Mutual and exchange traded funds | 255.5 | 255.5 | — | ||||||||||||||||||||
Total equity securities | 389.7 | 389.7 | — | ||||||||||||||||||||
Other invested assets | 15.3 | 15.3 | — | ||||||||||||||||||||
Total investments | $ | 2,642.2 | $ | 405.0 | $ | 2,237.2 | |||||||||||||||||
($ millions) | Total |
Quoted prices
in active
markets for
identical
assets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 578.5 | $ | — | $ | 578.5 | |||||||||||||||||
Obligations of states and political subdivisions | 425.4 | — | 425.4 | ||||||||||||||||||||
Corporate securities | 471.8 | — | 471.8 | ||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 652.7 | — | 652.7 | ||||||||||||||||||||
Total fixed maturities | 2,128.4 | — | 2,128.4 | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Large-cap securities | 104.4 | 104.4 | — | ||||||||||||||||||||
Mutual and exchange traded funds | 290.8 | 290.8 | — | ||||||||||||||||||||
Total equity securities | 395.2 | 395.2 | — | ||||||||||||||||||||
Other invested assets | 13.3 | 13.3 | — | ||||||||||||||||||||
Total investments | $ | 2,536.9 | $ | 408.5 | $ | 2,128.4 | |||||||||||||||||
($ millions, except interest rates)
|
December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||
Carrying
value
|
Fair
Value
|
Interest
rate
|
Carrying
value
|
Fair
value
|
Interest
rate
|
||||||||||||||||||||||||||||||
FHLB Loan due 2021:, issued $21.5, September 2016 with fixed interest | $ | — | $ | — | — | % | $ | 21.5 | $ | 21.5 | 1.73 | % | |||||||||||||||||||||||
FHLB Loan due 2030: issued $21.5, September 2020 with fixed interest | 21.5 | 21.6 | 1.37 | % | — | — | — | % | |||||||||||||||||||||||||||
FHLB Loan due 2033: issued $85.0, May 2018 with fixed interest | 85.3 | 107.1 | 3.96 | % | 85.3 | 97.8 | 3.96 | % | |||||||||||||||||||||||||||
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest | 15.3 | 15.3 | 4.43 | % | 15.2 | 15.2 | 6.11 | % | |||||||||||||||||||||||||||
Total notes payable | $ | 122.1 | $ | 144.0 | $ | 122.0 | $ | 134.5 | |||||||||||||||||||||||||||
($ millions) | 2020 | 2019 | 2018 | ||||||||||||||
Losses and loss expenses payable, at beginning of year | $ | 1,066.5 | $ | 1,146.8 | $ | 1,255.6 | |||||||||||
Less: reinsurance recoverable on losses and loss expenses payable | 13.6 | 5.5 | 3.1 | ||||||||||||||
Net balance at beginning of year | 1,052.9 | 1,141.3 | 1,252.5 | ||||||||||||||
Incurred related to: | |||||||||||||||||
Current year | 1,008.2 | 913.5 | 876.6 | ||||||||||||||
Prior years | (35.6) | (68.7) | (80.2) | ||||||||||||||
Total incurred | 972.6 | 844.8 | 796.4 | ||||||||||||||
Paid related to: | |||||||||||||||||
Current year | 599.5 | 530.4 | 456.5 | ||||||||||||||
Prior years | 399.9 | 402.8 | 451.1 | ||||||||||||||
Total paid | 999.4 | 933.2 | 907.6 | ||||||||||||||
Net balance at end of year | 1,026.1 | 1,052.9 | 1,141.3 | ||||||||||||||
Plus: reinsurance recoverable on losses and loss expenses payable | 24.3 | 13.6 | 5.5 | ||||||||||||||
Losses and loss expenses payable | $ | 1,050.4 | $ | 1,066.5 | $ | 1,146.8 | |||||||||||
($ in millions except number of claims) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incurred Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | As of December 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident Year | 2011* | 2012* | 2013* | 2014* | 2015* | 2016* | 2017* | 2018* | 2019* | 2020 | IBNR+ |
Reported Claims(1)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 44.6 | $ | 47.4 | $ | 45.5 | $ | 44.8 | $ | 44.8 | $ | 44.9 | $ | 43.9 | $ | 42.9 | $ | 42.3 | $ | 41.7 | $ | 1.9 | 12,228 | |||||||||||||||||||||||||||||||||||||||||||||||||||
2012 | 49.7 | 45.8 | 43.7 | 44.1 | 43.9 | 42.9 | 41.7 | 40.5 | 39.8 | 2.1 | 12,762 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 48.7 | 45.4 | 44.1 | 43.4 | 42.9 | 41.5 | 40.5 | 39.2 | 3.5 | 11,319 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 51.6 | 50.0 | 47.1 | 45.7 | 45.3 | 43.4 | 41.0 | 4.8 | 11,570 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 59.7 | 59.4 | 56.5 | 53.7 | 51.3 | 48.7 | 6.7 | 11,161 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 62.6 | 60.6 | 57.2 | 53.9 | 49.5 | 9.2 | 12,453 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 59.0 | 56.4 | 53.7 | 49.1 | 8.7 | 12,574 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 56.4 | 53.6 | 49.3 | 11.6 | 12,541 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 54.4 | 52.9 | 13.3 | 12,045 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 55.5 | 26.0 | 10,851 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 466.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* Supplementary information and unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Commercial insurance segment-long-tail consists of the workers' compensation product. Workers' compensation reported claims are counted by a combination of claimant and coverage.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident
Year |
2011* | 2012* | 2013* | 2014* | 2015* | 2016* | 2017* | 2018* | 2019* | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 12.4 | $ | 25.4 | $ | 31.9 | $ | 35.0 | $ | 36.9 | $ | 37.7 | $ | 38.1 | $ | 38.6 | $ | 38.9 | $ | 39.0 | ||||||||||||||||||||||||||||||||||||||||||
2012 | 12.6 | 23.5 | 29.8 | 32.7 | 34.7 | 35.8 | 36.4 | 36.6 | 36.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 12.3 | 23.3 | 29.0 | 32.3 | 33.7 | 34.2 | 34.4 | 34.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 12.4 | 24.4 | 30.0 | 32.8 | 34.1 | 34.6 | 35.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 13.9 | 28.2 | 35.7 | 38.3 | 39.5 | 40.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 12.6 | 26.8 | 32.3 | 35.6 | 37.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 13.2 | 27.0 | 32.8 | 36.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 13.2 | 26.4 | 32.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 14.7 | 29.2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | 13.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 334.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All outstanding liabilities before 2011, net of reinsurance | $ | 30.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses and allocated loss adjustment expenses payable, net of reinsurance | $ | 162.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* Supplementary information and unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||
Accident Year | 2016* | 2017* | 2018* | 2019* | 2020 | |||||||||||||||||||||||||||
2016 | $ | 25.2 | $ | 50.2 | $ | 69.9 | $ | 87.4 | $ | 96.0 | ||||||||||||||||||||||
2017 | 39.0 | 77.5 | 101.2 | 121.3 | ||||||||||||||||||||||||||||
2018 | 6.3 | 10.7 | 13.3 | |||||||||||||||||||||||||||||
2019 | 0.5 | 0.9 | ||||||||||||||||||||||||||||||
2020 | 0.1 | |||||||||||||||||||||||||||||||
Total | $ | 231.6 | ||||||||||||||||||||||||||||||
All outstanding liabilities before 2016, net of reinsurance | $ | 13.7 | ||||||||||||||||||||||||||||||
Losses and allocated loss adjustment expenses payable, net of reinsurance | $ | 59.2 | ||||||||||||||||||||||||||||||
* Supplementary information and unaudited | ||||||||||||||||||||||||||||||||
($ in millions) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cumulative Paid Losses and Allocated Loss Adjustment Expenses, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accident
Year |
2011* | 2012* | 2013* | 2014* | 2015* | 2016* | 2017* | 2018* | 2019* | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | $ | 0.9 | $ | 3.0 | $ | 5.2 | $ | 6.6 | $ | 7.1 | $ | 7.9 | $ | 8.1 | $ | 8.4 | $ | 8.6 | $ | 8.7 | ||||||||||||||||||||||||||||||||||||||||||
2012 | 0.9 | 4.0 | 7.3 | 10.3 | 12.5 | 14.0 | 14.1 | 14.7 | 14.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2013 | 1.1 | 3.7 | 6.7 | 9.0 | 10.5 | 12.0 | 13.3 | 13.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 1.2 | 7.2 | 12.5 | 16.7 | 21.5 | 24.2 | 25.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
2015 | 2.7 | 10.9 | 20.6 | 29.1 | 34.7 | 36.9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 6.0 | 15.7 | 31.5 | 39.7 | 53.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 | 5.5 | 16.4 | 25.2 | 35.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2018 | 2.7 | 12.8 | 20.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2019 | 0.1 | 0.5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2020 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 210.1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All outstanding liabilities before 2011, net of reinsurance | $ | 3.8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Losses and allocated loss adjustment expenses payable, net of reinsurance | $ | 107.3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
* Supplementary information and unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | 2020 | 2019 | 2018 | ||||||||||||||
Net losses and allocated loss adjustment expenses payable: | |||||||||||||||||
Personal Insurance Segment | |||||||||||||||||
Short-tail | $ | 250.2 | $ | 220.6 | $ | 216.0 | |||||||||||
Other personal | 14.9 | 14.4 | 13.5 | ||||||||||||||
Commercial Insurance Segment | |||||||||||||||||
Short-tail | 349.3 | 330.8 | 336.4 | ||||||||||||||
Long-tail | 162.9 | 174.2 | 182.1 | ||||||||||||||
Other commercial | 25.5 | 30.9 | 27.4 | ||||||||||||||
Specialty run-off | |||||||||||||||||
Short-tail | 59.2 | 84.9 | 128.5 | ||||||||||||||
Long-tail | 107.3 | 139.1 | 177.6 | ||||||||||||||
Net losses and loss expenses payable | 969.3 | 994.9 | 1,081.5 | ||||||||||||||
ULAE | 56.8 | 58.0 | 59.8 | ||||||||||||||
Reinsurance recoverable on losses and loss expenses payable | 24.3 | 13.6 | 5.5 | ||||||||||||||
Total losses and loss expenses payable | $ | 1,050.4 | $ | 1,066.5 | $ | 1,146.8 | |||||||||||
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment | 1* | 2* | 3* | 4* | 5* | 6* | 7* | 8* | 9* | 10* | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Personal Insurance: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-tail
|
66.4 | % | 22.9 | % | 6.3 | % | 3.0 | % | 1.2 | % | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial Insurance: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-tail
|
48.3 | % | 22.4 | % | 10.6 | % | 7.5 | % | 3.7 | % | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
Long-tail | 28.2 | % | 28.5 | % | 13.8 | % | 7.2 | % | 3.6 | % | 1.7 | % | 1.0 | % | 0.8 | % | 0.5 | % | 0.3 | % | ||||||||||||||||||||||||||||||||||||||||||
Specialty run-off: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-tail
|
32.5 | % | 27.5 | % | 15.7 | % | 15.0 | % | 8.2 | % | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
Long-tail
|
5.6 | % | 16.9 | % | 19.0 | % | 15.2 | % | 12.5 | % | 8.1 | % | 3.8 | % | 3.0 | % | 2.2 | % | 0.4 | % | ||||||||||||||||||||||||||||||||||||||||||
* Supplementary information and unaudited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ millions) | 2020 | 2019 | |||||||||
Losses and loss expenses payable: | |||||||||||
Direct | $ | 581.3 | $ | 540.1 | |||||||
Assumed | 30.3 | 25.6 | |||||||||
Ceded | (24.3) | (13.6) | |||||||||
Net losses and loss expenses payable | $ | 587.3 | $ | 552.1 | |||||||
Unearned premiums: | |||||||||||
Direct | $ | 507.7 | $ | 495.8 | |||||||
Assumed | 39.5 | 36.7 | |||||||||
Ceded | (8.3) | (7.5) | |||||||||
Net unearned premiums | $ | 538.9 | $ | 525.0 | |||||||
($ millions) | 2020 | 2019 | 2018 | ||||||||||||||
Written premiums: | |||||||||||||||||
Direct | $ | 1,080.5 | $ | 1,036.9 | $ | 915.1 | |||||||||||
Assumed | 87.6 | 82.5 | 75.1 | ||||||||||||||
Ceded | (39.8) | (31.9) | (23.1) | ||||||||||||||
Net written premiums | $ | 1,128.3 | $ | 1,087.5 | $ | 967.1 | |||||||||||
Earned premiums: | |||||||||||||||||
Direct | $ | 1,067.6 | $ | 976.8 | $ | 881.3 | |||||||||||
Assumed | 84.8 | 81.3 | 61.0 | ||||||||||||||
Ceded | (39.0) | (31.0) | (23.0) | ||||||||||||||
Net earned premiums | $ | 1,113.4 | $ | 1,027.1 | $ | 919.3 | |||||||||||
Losses and loss expenses incurred: | |||||||||||||||||
Direct | $ | 789.0 | $ | 631.4 | $ | 572.5 | |||||||||||
Assumed | 56.8 | 59.6 | 48.4 | ||||||||||||||
Ceded | (57.6) | (15.6) | (4.9) | ||||||||||||||
Net losses and loss expenses incurred | $ | 788.2 | $ | 675.4 | $ | 616.0 | |||||||||||
($ millions) | Amortized Cost | ||||||||||
Financial strength rating: | |||||||||||
A++ | $ | 1.1 | |||||||||
A+ | 9.5 | ||||||||||
A | 13.7 | ||||||||||
Reinsurance recoverable on losses and loss expenses payable, net of allowance for credit losses | $ | 24.3 | |||||||||
($ millions) | Allowance for credit losses | |||||||
Beginning balance at January 1, 2020 | $ | 4.3 | ||||||
Current period provision | 8.2 | |||||||
Writeoffs | (5.4) | |||||||
Ending balance at December 31, 2020 | $ | 7.1 | ||||||
($ millions) | 2020 | 2019 | |||||||||
Assets | |||||||||||
Deferred policy acquisition costs: | |||||||||||
Ceded | $ | (92.1) | $ | (90.9) | |||||||
Assumed | 122.2 | 111.1 | |||||||||
Net assumed | $ | 30.1 | $ | 20.2 | |||||||
Liabilities | |||||||||||
Losses and loss expenses payable: | |||||||||||
Ceded | $ | (587.3) | $ | (552.1) | |||||||
Assumed | 1,026.1 | 1,052.9 | |||||||||
Net assumed | $ | 438.8 | $ | 500.8 | |||||||
Unearned premiums: | |||||||||||
Ceded | $ | (262.7) | $ | (225.9) | |||||||
Assumed | 715.1 | 641.7 | |||||||||
Net assumed | $ | 452.4 | $ | 415.8 | |||||||
Other liabilities: | |||||||||||
Ceded | $ | (77.1) | $ | (77.8) | |||||||
Assumed | 99.5 | 94.0 | |||||||||
Net assumed | $ | 22.4 | $ | 16.1 | |||||||
($ millions) | 2020 | 2019 | 2018 | ||||||||||||||
Written premiums: | |||||||||||||||||
Ceded | $ | (1,128.3) | $ | (1,088.1) | $ | (966.8) | |||||||||||
Assumed | 1,456.3 | 1,315.3 | 1,209.9 | ||||||||||||||
Net assumed | $ | 328.0 | $ | 227.2 | $ | 243.1 | |||||||||||
Earned premiums: | |||||||||||||||||
Ceded | $ | (1,113.4) | $ | (1,027.7) | $ | (919.0) | |||||||||||
Assumed | 1,380.9 | 1,250.2 | 1,237.6 | ||||||||||||||
Net assumed | $ | 267.5 | $ | 222.5 | $ | 318.6 | |||||||||||
Losses and loss expenses incurred: | |||||||||||||||||
Ceded | $ | (789.7) | $ | (677.2) | $ | (617.6) | |||||||||||
Assumed | 973.9 | 846.5 | 798.1 | ||||||||||||||
Net assumed | $ | 184.2 | $ | 169.3 | $ | 180.5 | |||||||||||
Acquisition and operating expenses: | |||||||||||||||||
Ceded | (374.8) | (370.0) | (341.1) | ||||||||||||||
Assumed | 477.4 | 439.1 | 449.8 | ||||||||||||||
Net assumed | $ | 102.6 | $ | 69.1 | $ | 108.7 | |||||||||||
($ millions) | 2020 | 2019 | |||||||||
Deferred tax assets: | |||||||||||
Unearned premiums not currently deductible | $ | 30.1 | $ | 27.0 | |||||||
Losses and loss expenses payable discounting | 10.5 | 10.6 | |||||||||
Postretirement and pension benefits | 19.3 | 17.1 | |||||||||
Other liabilities | 12.2 | 13.4 | |||||||||
Net operating loss carryforward | 19.8 | 12.6 | |||||||||
Capital loss carryforward | 6.1 | — | |||||||||
Tax credit carryforward | 1.9 | 2.5 | |||||||||
Other | 1.1 | 1.1 | |||||||||
Total deferred tax assets | 101.0 | 84.3 | |||||||||
Deferred tax liabilities: | |||||||||||
Deferral of policy acquisition costs | 25.7 | 23.3 | |||||||||
Investments | 48.0 | 21.3 | |||||||||
Total deferred tax liabilities | 73.7 | 44.6 | |||||||||
Net deferred federal income taxes | $ | 27.3 | $ | 39.7 | |||||||
($ millions) | Pension | Postretirement | |||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Change in benefit obligation: | |||||||||||||||||||||||
Benefit obligation at beginning of year | $ | 478.4 | $ | 428.1 | $ | 11.4 | $ | 25.5 | |||||||||||||||
Service cost | 7.3 | 5.8 | — | — | |||||||||||||||||||
Interest cost | 14.5 | 17.2 | 0.3 | 1.0 | |||||||||||||||||||
Actuarial loss (gain) | 72.3 | 60.6 | (0.9) | (12.6) | |||||||||||||||||||
Benefits paid | (22.9) | (33.3) | (0.6) | (2.5) | |||||||||||||||||||
Benefit obligation at end of year | 549.6 | 478.4 | 10.2 | 11.4 | |||||||||||||||||||
Change in plan assets available for plan benefits: | |||||||||||||||||||||||
Fair value of plan assets available for plan benefits at beginning of year | 442.1 | 381.6 | — | — | |||||||||||||||||||
Employer contribution | 15.0 | 10.0 | — | — | |||||||||||||||||||
Actual return on plan assets | 72.5 | 83.8 | — | — | |||||||||||||||||||
Benefits paid | (22.9) | (33.3) | — | — | |||||||||||||||||||
Fair value of plan assets at end of year | $ | 506.7 | $ | 442.1 | $ | — | $ | — | |||||||||||||||
Supplemental executive retirement plan | (13.1) | (11.8) | — | — | |||||||||||||||||||
Funded status at end of year | $ | (56.0) | $ | (48.1) | $ | (10.2) | $ | (11.4) | |||||||||||||||
Accumulated benefit obligation end of year | $ | 522.8 | $ | 453.8 | |||||||||||||||||||
($ millions) | 2020 | 2019 | |||||||||
Prior service benefit | $ | (37.0) | $ | (43.4) | |||||||
Net actuarial loss | 157.4 | 143.7 | |||||||||
Total | $ | 120.4 | $ | 100.3 | |||||||
($ millions) | Pension | Postretirement | |||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Components of net periodic cost: | |||||||||||||||||||||||||||||||||||
Service cost | $ | 4.8 | $ | 3.8 | $ | 5.1 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Interest cost | 9.7 | 11.5 | 10.7 | 0.2 | 0.7 | 0.8 | |||||||||||||||||||||||||||||
Expected return on plan assets | (17.5) | (17.8) | (18.0) | — | — | — | |||||||||||||||||||||||||||||
Amortization of: | |||||||||||||||||||||||||||||||||||
Prior service benefit | — | — | — | (5.5) | (5.5) | (5.5) | |||||||||||||||||||||||||||||
Net actuarial loss | 9.2 | 6.0 | 8.2 | (0.2) | 0.2 | 0.2 | |||||||||||||||||||||||||||||
Net periodic cost (benefit) | $ | 6.2 | $ | 3.5 | $ | 6.0 | $ | (5.5) | $ | (4.6) | $ | (4.5) | |||||||||||||||||||||||
($ millions) | Pension | Postretirement | |||||||||
2021 | $ | 18.3 | $ | 0.7 | |||||||
2022 | 18.9 | 0.6 | |||||||||
2023 | 19.6 | 0.6 | |||||||||
2024 | 20.6 | 0.6 | |||||||||
2025 | 21.6 | 0.6 | |||||||||
2026-2030 | 123.0 | 3.1 |
Pension | Postretirement | ||||||||||||||||||||||
|
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Benefit obligations weighted-average assumptions: | |||||||||||||||||||||||
Discount rate | 2.32 | % | 3.10 | % | 1.95 | % | 3.00 | % | |||||||||||||||
Rates of increase in compensation levels | 3.00 | 3.25 | — | — |
Pension | Postretirement | ||||||||||||||||||||||||||||||||||
|
2020 | 2019 | 2018 | 2020 | 2019 | 2018 | |||||||||||||||||||||||||||||
Weighted-average assumptions: | |||||||||||||||||||||||||||||||||||
Discount rate | 3.10 | % | 4.12 | % | 3.50 | % | 3.10 | % | 4.12 | % | 3.50 | % | |||||||||||||||||||||||
Expected long-term rate of return on assets | 6.50 | 6.75 | 7.00 | — | — | — | |||||||||||||||||||||||||||||
Rates of increase in compensation levels | 3.25 | 3.25 | 3.25 | — | — | — |
|
Asset
allocation
target
(0 to 100%)
|
||||
Asset Category: | |||||
Fixed maturity | 61.0 | % | |||
U.S. large-cap equity | 19.8 | ||||
U.S. small-cap equity | 8.3 | ||||
International equity | 7.6 | ||||
Emerging market equity | 3.3 | ||||
Total | 100.0 | % | |||
($ millions) | Total |
Quoted prices
in active
markets for
identical
assets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
||||||||||||||||||||
December 31, 2020 | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 90.5 | $ | — | $ | 90.5 | |||||||||||||||||
Corporate securities | 183.9 | — | 183.9 | ||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 3.9 | — | 3.9 | ||||||||||||||||||||
Total fixed maturities | 278.3 | — | 278.3 | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Large-cap securities | 116.2 | 116.2 | — | ||||||||||||||||||||
Mutual and exchange traded funds | 56.1 | 56.1 | — | ||||||||||||||||||||
Total equity securities | 172.3 | 172.3 | — | ||||||||||||||||||||
Total pension plan investments | $ | 450.6 | $ | 172.3 | $ | 278.3 | |||||||||||||||||
($ millions) | Total |
Quoted prices
in active
markets for
identical
assets
(Level 1)
|
Significant
other
observable
inputs
(Level 2)
|
||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||
Fixed maturities: | |||||||||||||||||||||||
U.S. treasury securities and obligations of U.S. government agencies | $ | 98.6 | $ | — | $ | 98.6 | |||||||||||||||||
Corporate securities | 153.1 | — | 153.1 | ||||||||||||||||||||
U.S. government agencies mortgage-backed securities | 4.0 | — | 4.0 | ||||||||||||||||||||
Total fixed maturities | 255.7 | — | 255.7 | ||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||
Large-cap securities | 91.9 | 91.9 | — | ||||||||||||||||||||
Mutual and exchange traded funds | 49.7 | 49.7 | — | ||||||||||||||||||||
Total equity securities | 141.6 | 141.6 | — | ||||||||||||||||||||
Total pension plan investments | $ | 397.3 | $ | 141.6 | $ | 255.7 | |||||||||||||||||
($ millions)
|
Unrealized Gains and Losses on Available-for-Sale Securities | Benefit Plan Items | Total | ||||||||||||||
Beginning balance at January 1, 2020 | $ | 40.8 | $ | (67.7) | $ | (26.9) | |||||||||||
Other comprehensive income (loss) before reclassifications | 56.4 | (27.4) | 29.0 | ||||||||||||||
Amounts reclassified from AOCI (a)
|
$ | 0.3 | 11.5 | 11.8 | |||||||||||||
Net current period other comprehensive income (loss) | 56.7 | (15.9) | 40.8 | ||||||||||||||
Ending balance at December 31, 2020 | $ | 97.5 | $ | (83.6) | $ | 13.9 | |||||||||||
Beginning balance at January 1, 2019 | $ | (20.2) | $ | (76.2) | $ | (96.4) | |||||||||||
Other comprehensive income before reclassifications | 63.8 | 7.5 | 71.3 | ||||||||||||||
Amounts reclassified from AOCI (a)
|
(2.8) | 1.0 | (1.8) | ||||||||||||||
Net current period other comprehensive income | 61.0 | 8.5 | 69.5 | ||||||||||||||
Ending balance at December 31, 2019 | $ | 40.8 | $ | (67.7) | $ | (26.9) | |||||||||||
Beginning balance at January 1, 2018 | $ | 66.0 | $ | (62.2) | $ | 3.8 | |||||||||||
Cumulative effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018 | (47.9) | (16.0) | (63.9) | ||||||||||||||
Other comprehensive loss before reclassifications | (36.7) | (4.3) | (41.0) | ||||||||||||||
Amounts reclassified from AOCI (a)
|
(1.6) | 6.3 | 4.7 | ||||||||||||||
Net current period other comprehensive (loss) income | (38.3) | 2.0 | (36.3) | ||||||||||||||
Ending balance at December 31, 2018 | $ | (20.2) | $ | (76.2) | $ | (96.4) | |||||||||||
(a) See separate table below for details about these reclassifications
|
2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||
|
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 | 460,189 | $ | 29.37 | 356,400 | $ | 27.47 | 147,869 | $ | 27.20 | ||||||||||||||||||||||||||
Granted | 153,574 | 24.40 | 130,680 | 33.67 | 224,449 | 27.65 | |||||||||||||||||||||||||||||
Vested | (103,345) | 27.24 | (12,500) | 27.65 | — | — | |||||||||||||||||||||||||||||
Forfeited | (5,915) | 28.64 | (14,391) | 29.59 | (15,918) | 27.37 | |||||||||||||||||||||||||||||
Outstanding, end of year | 504,503 | $ | 28.06 | 460,189 | $ | 29.37 | 356,400 | $ | 27.47 | ||||||||||||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||||||||||||||||||||
|
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 | 67,934 | $ | 27.65 | 126,946 | $ | 26.21 | 71,578 | $ | 22.44 | ||||||||||||||||||||||||||
Granted | 30,618 | 16.33 | — | — | 97,049 | 27.65 | |||||||||||||||||||||||||||||
Vested | (27,716) | 27.65 | (58,801) | 24.57 | (37,644) | 22.88 | |||||||||||||||||||||||||||||
Forfeited | — | — | (211) | 21.54 | (4,037) | 24.82 | |||||||||||||||||||||||||||||
Outstanding, end of year | 70,836 | $ | 22.76 | 67,934 | $ | 27.65 | 126,946 | $ | 26.21 | ||||||||||||||||||||||||||
(millions, except per share amounts) | 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||||
|
Options |
Weighted-
Average
Exercise
Price
|
Options |
Weighted-
Average
Exercise
Price
|
Options |
Weighted-
Average
Exercise
Price
|
|||||||||||||||||||||||||||||
Outstanding, beginning of year | 0.8 | $ | 19.18 | 1.0 | $ | 18.50 | 1.7 | $ | 19.22 | ||||||||||||||||||||||||||
Exercised | (0.1) | 18.55 | (0.2) | 16.45 | (0.7) | 20.08 | |||||||||||||||||||||||||||||
Outstanding, end of year | 0.7 | $ | 19.28 | 0.8 | $ | 19.18 | 1.0 | $ | 18.50 | ||||||||||||||||||||||||||
(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 | 0.3 | 1.5 | $ | 16.33 | 0.3 | $ | 16.33 | ||||||||||||||||||||||
$20.01 – $30.00 | 0.4 | 4.0 | 21.97 | 0.4 | 21.97 | ||||||||||||||||||||||||
Total | 0.7 | 2.8 | $ | 19.28 | 0.7 | $ | 19.28 | ||||||||||||||||||||||
(millions, except per share amounts) | 2020 | 2019 | 2018 | ||||||||||||||
Numerator: | |||||||||||||||||
Net earnings for basic net earnings per common share | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
Effect of dilutive share-based awards | — | (1.1) | — | ||||||||||||||
Adjusted net earnings for dilutive net earnings per common share | $ | 13.1 | $ | 84.7 | $ | 12.2 | |||||||||||
Denominator: | |||||||||||||||||
Weighted average shares for basic net earnings per common share | 43.7 | 43.4 | 42.8 | ||||||||||||||
Effect of dilutive share-based awards | 0.6 | 0.6 | 0.6 | ||||||||||||||
Adjusted weighted average shares for diluted net earnings per common share | 44.3 | 44.0 | 43.4 | ||||||||||||||
Basic net earnings per common share | $ | 0.30 | $ | 1.98 | $ | 0.29 | |||||||||||
Diluted net earnings per common share | $ | 0.30 | $ | 1.93 | $ | 0.28 | |||||||||||
(millions) | 2018 | ||||||||||||||||
Total number of antidilutive options and awards | 0.1 | ||||||||||||||||
($ millions) | 2020 | 2019 | 2018 | ||||||||||||||
Revenues from external sources: | |||||||||||||||||
Insurance operations | |||||||||||||||||
Personal insurance | $ | 819.0 | $ | 755.9 | $ | 673.4 | |||||||||||
Commercial insurance | 561.8 | 488.6 | 464.4 | ||||||||||||||
Specialty run-off | 0.1 | 5.7 | 99.8 | ||||||||||||||
Total insurance operations | 1,380.9 | 1,250.2 | 1,237.6 | ||||||||||||||
Investment operations segment | |||||||||||||||||
Net investment income | 72.1 | 80.4 | 84.9 | ||||||||||||||
Net investment gain (loss) | 27.3 | 74.2 | (49.7) | ||||||||||||||
Total investment operations | 99.4 | 154.6 | 35.2 | ||||||||||||||
All other | 2.1 | 2.4 | 2.6 | ||||||||||||||
Total revenues from external sources | 1,482.4 | 1,407.2 | 1,275.4 | ||||||||||||||
Intersegment revenues | 6.2 | 6.5 | 6.5 | ||||||||||||||
Total revenues | 1,488.6 | 1,413.7 | 1,281.9 | ||||||||||||||
Reconciling items: | |||||||||||||||||
Eliminate intersegment revenues | (6.2) | (6.5) | (6.5) | ||||||||||||||
Total consolidated revenue | $ | 1,482.4 | $ | 1,407.2 | $ | 1,275.4 | |||||||||||
Segment (loss) income before federal income taxes: | |||||||||||||||||
Insurance operations SAP underwriting (loss) gain | |||||||||||||||||
Personal insurance | $ | (68.8) | $ | (42.2) | $ | 2.8 | |||||||||||
Commercial insurance | (7.4) | (0.2) | (8.7) | ||||||||||||||
Specialty run-off | (17.6) | (9.7) | 0.4 | ||||||||||||||
Total insurance operations | (93.8) | (52.1) | (5.5) | ||||||||||||||
Investment operations segment: | |||||||||||||||||
Net investment income | 72.1 | 80.4 | 84.9 | ||||||||||||||
Net investment gain (loss) | 27.3 | 74.2 | (49.7) | ||||||||||||||
Total investment operations | 99.4 | 154.6 | 35.2 | ||||||||||||||
All other | (0.1) | 0.3 | 0.4 | ||||||||||||||
Reconciling items: | |||||||||||||||||
GAAP adjustments | 19.8 | 14.7 | (3.7) | ||||||||||||||
Interest expense on corporate debt | (4.7) | (4.9) | (5.7) | ||||||||||||||
Corporate expenses | (6.2) | (7.1) | (8.6) | ||||||||||||||
Total reconciling items | $ | 8.9 | $ | 2.7 | $ | (18.0) | |||||||||||
Total consolidated income before federal income taxes | $ | 14.4 | $ | 105.5 | $ | 12.1 | |||||||||||
($ millions) | 2020 | 2019 | |||||||||
Segment assets: | |||||||||||
Investment operations segment | $ | 2,870.8 | $ | 2,747.8 | |||||||
Total segment assets | 2,870.8 | 2,747.8 | |||||||||
Reconciling items: | |||||||||||
Corporate assets | 231.7 | 231.8 | |||||||||
Total consolidated assets | $ | 3,102.5 | $ | 2,979.6 | |||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
3.01 | 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 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 3.04 therein) | |||||||||||||
3.05 | Form 10-Q Quarterly Report for the period ended September 30, 2010 (see Exhibit 3.05 therein) | |||||||||||||
3.06 | Form 10-Q Quarterly Report for the period ended June 30, 2016 (see Exhibit 3.01 therein) | |||||||||||||
4.01 | Form 10-K Annual Report for the year ended December 31, 2019 (see Exhibit 4.01 therein) |
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.01 | 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) | ||||||||||||
10.02 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.09 therein) | |||||||||||||
10.03 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.10 therein) | |||||||||||||
10.04 | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.17 therein) | |||||||||||||
10.05 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.12 therein) | |||||||||||||
10.06 | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.19 therein) | |||||||||||||
10.07 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.15 therein) | |||||||||||||
10.08 | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.20 therein) | |||||||||||||
10.09 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.17 therein) | |||||||||||||
10.10 | Form 10-K Annual Report for the year ended December 31, 2007 (see Exhibit 10.22 therein) | |||||||||||||
10.11 | Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.26 therein) | |||||||||||||
10.12 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.22 therein) | |||||||||||||
10.13 | Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.27 therein) | |||||||||||||
10.14 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.24 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.15 | Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.28) therein) | |||||||||||||
10.16 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.26 therein) | |||||||||||||
10.17 | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.45 therein) | |||||||||||||
10.18 | Form 10-Q Quarterly Report for the period ended June 30, 2015 (see Exhibit 10.01 therein) | |||||||||||||
10.19 | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 10.26 therein) | |||||||||||||
10.20 | Form 10-Q Quarterly Report for the period ended March 31, 2018 (see Exhibit 10.01 therein) |
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.21 | Form 10-Q Quarterly Report for the period ended September 30, 2009 (see Exhibit 10.01 therein) | |||||||||||||
10.22 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.35 therein) | |||||||||||||
10.23 | Form 8-K Current Report filed on November 25, 2009 (see Exhibit 10.1 therein) | |||||||||||||
10.24 | Form 8-K Current Report filed on January 7, 2011 (see Exhibit 10.2 therein) | |||||||||||||
10.25 | Form 10-K Annual Report for the year ended December 31, 2012 (see Exhibit 10.39 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.26 | Form 8-K Current Report filed on January 7, 2011 (see Exhibit 10.1 therein) | |||||||||||||
10.27 | Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.45 therein) | |||||||||||||
10.28 | Form 10-Q Quarterly Report for the period ended March 31, 2013 (see Exhibit 10.1 therein) | |||||||||||||
10.29 | Form 10-Q Quarterly Report for the period ended September 30, 2014 (see Exhibit 10.01 therein) | |||||||||||||
10.30 | Form 10-Q Quarterly Report for the period ended June 30, 2003 (see 10(XX) therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.31 | Form 10-Q Quarterly Report for the period ended June 30, 2003 (see 10(YY) therein) | |||||||||||||
10.32 | Form 8-K Current Report filed on May 26, 2009 (see Exhibit 10.1 therein) | |||||||||||||
10.33 | Form 8-K Current Report filed May 8, 2019 (see Exhibit 10.02 therein) | |||||||||||||
10.34 | Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.1 therein) | |||||||||||||
10.35 | Form 8-K Current Report filed May 8, 2019 (see Exhibit 10.01 therein) | |||||||||||||
10.36 | Form 10-Q Quarterly Report for the period ended June 30, 2013 (see Exhibit 10.02 therein) | |||||||||||||
10.37 | Form 10-Q Quarterly Report for the period ended June 30, 2013 (see Exhibit 10.03 therein) | |||||||||||||
10.38 | Form 8-K Current Report filed on September 4, 2020 (see Exhibit 10.01 therein) | |||||||||||||
10.39 | Form 8-K Current Report filed on April 2, 2020 (see Exhibit 10.01 therein) | |||||||||||||
10.40 | Form 8-K Current Report filed on May 23, 2018 (see Exhibit 10.1 therein) | |||||||||||||
10.41* | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 10.42 therein) | |||||||||||||
10.42* | Form 8-K Current Report filed on November 25, 2020 (see Exhibit 10.02 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.43* | Form of 8-K Current Report filed on November 25, 2020 (see Exhibit 10.02 therein) | |||||||||||||
10.44* | Form of 8-K Current Report filed on November 25, 2020 (see Exhibit 10.01 there) | |||||||||||||
10.45* | Form of 8-K Current Report filed on November 25, 2020 (see Exhibit 10.02 therein) | |||||||||||||
10.46* | Form of 8-K Current Report filed on November 25, 2020, (see Exhibit 10.02 therein) | |||||||||||||
10.47* | Form 8-K Current Report filed on November 20, 2008 (see Exhibit 99.1 therein) | |||||||||||||
10.48* | Form 8-K Current Report filed on March 22, 2018 (see Exhibit 10.1 therein) | |||||||||||||
10.49* | Form 8-K Current Report filed on March 22, 2018 (see Exhibit 10.2 therein) | |||||||||||||
10.50* | Form 8-K Current Report filed on March 22, 2018 (see Exhibit 10.3 therein) | |||||||||||||
10.51* | Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.3 therein) | |||||||||||||
10.52* | Form 10-Q Quarterly Report for the period ended June 30, 2017 (see Exhibit 10.01 therein) | |||||||||||||
10.53* | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 10.50 therein) | |||||||||||||
10.54* | For 8-K Current Report filed May 13, 2020 (see Exhibit 10.01 therein) | |||||||||||||
10.55* | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 10.52 therein) | |||||||||||||
10.56* | Form 10-Q Quarterly Report for the period ended June 30, 2020 (see Exhibit 10.01 therein) | |||||||||||||
10.57* | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 10.54 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.58* | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 10.55 therein) | |||||||||||||
10.59* | Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.60 therein) | |||||||||||||
10.60* | Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.63 therein) | |||||||||||||
10.61* | Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.62 therein) | |||||||||||||
10.62* | Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.63 therein) | |||||||||||||
10.63* | Form 8-K Current Report filed on May 13, 2009 (see Exhibit 10.7 therein) | |||||||||||||
10.64* | Form 10-Q Quarterly Report for the period ended June 30, 2011 (see Exhibit 10.01 therein) | |||||||||||||
10.65* | Form 10-Q Quarterly Report for the period ended September 30, 2013 (see Exhibit 10.01 therein) | |||||||||||||
10.66* | Form 10-K Annual Report for the year ended December 31, 2014 (see Exhibit 10.69 therein) | |||||||||||||
10.67* | Form 10-Q Quarterly Report for the period ended June 30, 2016 (see Exhibit 10.01 therein) | |||||||||||||
10.68* | Form 10-Q Quarterly Report for the period ended March 31, 2014 (see Exhibit 10.02 therein) | |||||||||||||
10.69* | Form 8-K Current Report filed on May 13, 2015 (see Exhibit 10.02 therein) | |||||||||||||
10.70* | Form 8-K Current Report filed on May 13, 2015 (see Exhibit 10.06 therein) | |||||||||||||
10.71* | Form 10-Q Quarterly Report for the period ended March 31, 2016 (see Exhibit 10.01 therein) | |||||||||||||
10.72* | Form 10-Q Quarterly Report for the period ended March 31, 2016 (see Exhibit 10.02 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.74* | Form 10-Q Quarterly Report for the period ended March 31, 2016 (see Exhibit 10.04 therein) | |||||||||||||
10.75* | Form 10-Q Quarterly Report for the period ended March 31, 2016 (see Exhibit 10.05 therein) | |||||||||||||
10.76* | Form 10-Q Quarterly Report for the period ended March 31, 2016 (see Exhibit 10.06 therein) | |||||||||||||
10.77* | Form 10-K Annual Report for the year ended December 31, 2016 (see Exhibit 10.74 therein) | |||||||||||||
10.78* | Form 10-K Annual Report for the year ended December 31, 2016 (see Exhibit 10.75 therein) | |||||||||||||
10.79* | Form 10-K Annual Report for the year ended December 31, 2016 (see Exhibit 10.76 therein) | |||||||||||||
10.80* | Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.61 therein) | |||||||||||||
10.81* | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.54 therein) | |||||||||||||
10.82* | Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.73 therein) | |||||||||||||
10.83* | Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.89 therein) | |||||||||||||
10.84* | Form 10-Q Quarterly Report for the period ended June 30, 2016 (see Exhibit 10.02 therein) | |||||||||||||
10.85* | Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.64 therein) | |||||||||||||
10.86* | Form 10-Q Quarterly Report for the period ended June 30, 2005 (see Exhibit 10.65 therein) | |||||||||||||
10.87* | Form 10-Q Quarterly Report for the period ended June 30, 2010 (see Exhibit 10.01 therein) | |||||||||||||
10.88* | Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.96 therein) | |||||||||||||
10.89* | Form 10-Q Quarterly Report for the period ended September 30, 2007 (see Exhibit 10.72 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.90* | Form 10-K Annual Report for year ended December 31, 2010 (see Exhibit 10.98 therein) | |||||||||||||
10.91* | Form 10-Q Quarterly Report for the period ended September 30, 2007 (see Exhibit 10.73 therein) | |||||||||||||
10.92* | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.58 therein) | |||||||||||||
10.93* | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.59 therein) | |||||||||||||
10.94* | Form 10-Q Quarterly Report for the period ended September 30, 2008 (see Exhibit 10.02 therein) | |||||||||||||
10.95* | Form 10-K Annual Report for the year ended December 31, 2008 (see Exhibit 10.84 therein) | |||||||||||||
10.96* | 1933 Act Registration Statement No. 333-170564 on Form S-8 (see Exhibit 4(j) therein) | |||||||||||||
10.97* | Form 10-Q Quarterly Report for the period ended September 30, 2012 (see Exhibit 10.1 therein) | |||||||||||||
10.98* | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.60 therein) | |||||||||||||
10.99* | Form 10-K Annual Report for the year ended December 31, 2005 (see Exhibit 10.61 therein) | |||||||||||||
10.100* | 1933 Act Registration Statement No. 333-165366 on Form S-8 (see Exhibit 4(e) therein) | |||||||||||||
10.101* | Form 10-Q Quarterly Report for the period ended June 30, 2010 (see Exhibit 10.02 therein) | |||||||||||||
10.102* | 1933 Act Registration Statement No. 333-170568 on Form S-8 (see Exhibit 4(h) therein) | |||||||||||||
10.103* | Form 10-K Annual Report for year ended December 31, 2011 (see Exhibit 10.109 therein) | |||||||||||||
Exhibit
No.
|
Description of Exhibit |
If incorporated by reference document with which Exhibit was
previously filed with SEC
|
||||||||||||
10.104* | Form 10-Q Quarterly Report for the period ended June 30, 2016 (see Exhibit 10.03 therein) | |||||||||||||
21.01 | Included herein | |||||||||||||
23.01 | Included herein | |||||||||||||
23.02 | Included herein | |||||||||||||
24.01 |
Form 10-K Annual Report for year ended December 31, 2016 (see Exhibit 24.01 therein)
|
|||||||||||||
24.02 | Form 10-K Annual Report for the year ended December 31, 2017 (see Exhibit 24.02 therein) | |||||||||||||
24.03 | Included herein | |||||||||||||
31.01 | Included herein | |||||||||||||
31.02 | Included herein | |||||||||||||
32.01 | Included herein | |||||||||||||
32.02 | Included herein | |||||||||||||
101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within | |||||||||||||
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 | ||||||||||||
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. |
STATE AUTO FINANCIAL CORPORATION
|
|||||
Dated: March 10, 2021 | /s/ Michael E. LaRocco | ||||
Michael E. LaRocco | |||||
Chairman, President and Chief Executive Officer |
Name | Title | Date | ||||||||||||
/s/ Michael E. LaRocco | Chairman, President and Chief Executive Officer | March 10, 2021 | ||||||||||||
Michael E. LaRocco | (principal executive officer) | |||||||||||||
/s/ Steven E. English | Senior Vice President and Chief Financial Officer | March 10, 2021 | ||||||||||||
Steven E. English | (principal financial officer) | |||||||||||||
/s/ Matthew R. Pollak | Vice President, Treasurer and Chief Accounting Officer | March 10, 2021 | ||||||||||||
Matthew R. Pollak | (principal accounting officer) | |||||||||||||
Robert E. Baker* | Director | March 10, 2021 | ||||||||||||
Robert E. Baker | ||||||||||||||
Michael J. Fiorile* | Director | March 10, 2021 | ||||||||||||
Michael J. Fiorile | ||||||||||||||
Kym M. Hubbard* | Director | March 10, 2021 | ||||||||||||
Kym M. Hubbard | ||||||||||||||
Eileen A. Mallesch* | Director | March 10, 2021 | ||||||||||||
Eileen A. Mallesch | ||||||||||||||
David R. Meuse* | Director | March 10, 2021 | ||||||||||||
David R. Meuse | ||||||||||||||
Setareh Pouraghabagher* | Director | March 10, 2021 | ||||||||||||
Setareh Pouraghabagher | ||||||||||||||
S. Elaine Roberts* | Director | March 10, 2021 | ||||||||||||
S. Elaine Roberts | ||||||||||||||
Dwight E. Smith* | Director | March 10, 2021 | ||||||||||||
Dwight E. Smith | ||||||||||||||
* | 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/ Steven E. English | Attorney in Fact | March 10, 2021 | ||||||||||||
Steven E. English |
($ millions) | ||||||||||||||||||||
December 31, 2020 |
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 | $ | 506.5 | $ | 551.7 | $ | 551.7 | ||||||||||||||
Obligations of states and political subdivisions | 511.3 | 541.5 | 541.5 | |||||||||||||||||
Corporate securities | 459.9 | 483.3 | 483.3 | |||||||||||||||||
U.S. government agencies residential mortgage-backed securities | 639.3 | 660.7 | 660.7 | |||||||||||||||||
Total available-for-sale fixed maturities | 2,117.0 | 2,237.2 | 2,237.2 | |||||||||||||||||
(1) | Original cost of fixed maturities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts. |
($ and shares in millions, except per share amounts) | December 31 | ||||||||||
2020 | 2019 | ||||||||||
Assets | |||||||||||
Investments in common stock of subsidiaries (equity method) | $ | 1,108.6 | $ | 1,067.5 | |||||||
Other invested assets | 5.6 | 5.0 | |||||||||
Cash and cash equivalents | 7.3 | 8.8 | |||||||||
Other assets | — | 0.1 | |||||||||
Due from affiliates | 0.8 | — | |||||||||
Federal income tax, net | 14.0 | 15.2 | |||||||||
Total assets | $ | 1,136.3 | $ | 1,096.6 | |||||||
Liabilities and Stockholders’ Equity | |||||||||||
Notes payable (affiliates $116.6 and $116.6, respectively) | $ | 116.6 | $ | 116.6 | |||||||
Due to affiliates | — | 0.7 | |||||||||
Other liabilities | 9.7 | 11.8 | |||||||||
Total liabilities | 126.3 | 129.1 | |||||||||
Stockholders’ equity: | |||||||||||
Common stock, without par value. Authorized 100.0 shares; 50.7 and 50.4 shares issued, respectively, at stated value of $2.50 per share | 126.8 | 125.9 | |||||||||
Treasury stock, 6.9 and 6.9 shares, respectively, at cost | (118.4) | (117.5) | |||||||||
Additional paid-in capital | 213.3 | 206.7 | |||||||||
Accumulated other comprehensive income | 13.9 | (26.9) | |||||||||
Retained earnings | 774.4 | 779.3 | |||||||||
Total stockholders’ equity | 1,010.0 | 967.5 | |||||||||
Total liabilities and stockholders’ equity | $ | 1,136.3 | $ | 1,096.6 | |||||||
($ millions) | Year ended December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Net investment income | $ | 0.4 | $ | 0.5 | $ | 0.5 | |||||||||||
Net investment gain (loss) | 0.2 | 0.8 | (0.6) | ||||||||||||||
Total revenues | 0.6 | 1.3 | (0.1) | ||||||||||||||
Interest expense (affiliates $6.1, $6.3 and $6.3, respectively) | 6.1 | 6.3 | 6.3 | ||||||||||||||
Other operating expenses | 1.0 | 5.2 | 7.1 | ||||||||||||||
Total expenses | 7.1 | 11.5 | 13.4 | ||||||||||||||
Loss before federal income taxes | (6.5) | (10.2) | (13.5) | ||||||||||||||
Federal income tax benefit | (1.5) | (2.8) | (3.4) | ||||||||||||||
Net loss before equity in net income of subsidiaries | (5.0) | (7.4) | (10.1) | ||||||||||||||
Equity in net income of subsidiaries | 18.1 | 93.2 | 22.3 | ||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
($ millions, except per share amounts) | Year ended December 31 | ||||||||||||||||
2020 | 2019 | 2018 | |||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||
Unrealized equity in subsidiaries | 40.8 | 69.5 | (36.3) | ||||||||||||||
Other comprehensive income (loss) | 40.8 | 69.5 | (36.3) | ||||||||||||||
Comprehensive income (loss) | $ | 53.9 | $ | 155.3 | $ | (24.1) | |||||||||||
($ millions) | Year ended December 31 | ||||||||||||||||
|
2020 | 2019 | 2018 | ||||||||||||||
Cash flows used in operating activities: | |||||||||||||||||
Net income | $ | 13.1 | $ | 85.8 | $ | 12.2 | |||||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||||||||
Share-based compensation | (2.7) | (1.4) | 2.0 | ||||||||||||||
Net investment (gain) loss | (0.2) | (0.8) | 0.5 | ||||||||||||||
Equity in net gain from consolidated subsidiaries | (18.1) | (93.2) | (22.3) | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Other liabilities and due from affiliates | (0.8) | 1.1 | (0.1) | ||||||||||||||
Excess tax (benefit) expense on share-based awards | — | (0.9) | 0.9 | ||||||||||||||
Federal income taxes, net | 1.2 | 0.9 | (0.3) | ||||||||||||||
Net cash used in operating activities | (7.5) | (8.5) | (7.1) | ||||||||||||||
Cash flows provided by investing activities: | |||||||||||||||||
Dividends received from consolidated subsidiaries | 21.0 | 14.8 | 15.4 | ||||||||||||||
Purchases of other invested assets | (0.5) | (0.3) | (0.4) | ||||||||||||||
Net cash provided by investing activities | 20.5 | 14.5 | 15.0 | ||||||||||||||
Cash flows used in financing activities: | |||||||||||||||||
Proceeds from issuance of common stock | 3.9 | 5.9 | 15.4 | ||||||||||||||
Payments to acquire treasury stock | (0.9) | (0.5) | (0.2) | ||||||||||||||
Payment of dividends | (17.5) | (17.4) | (17.1) | ||||||||||||||
Net cash used in financing activities | (14.5) | (12.0) | (1.9) | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | (1.5) | (6.0) | 6.0 | ||||||||||||||
Cash and cash equivalents at beginning of year | 8.8 | 14.8 | 8.8 | ||||||||||||||
Cash and cash equivalents at end of year | $ | 7.3 | $ | 8.8 | $ | 14.8 | |||||||||||
Supplemental Disclosures: | |||||||||||||||||
Federal income tax received | 2.7 | 2.8 | 4.0 | ||||||||||||||
Interest paid (affiliates $6.1, $6.3 and $6.3, respectively) | $ | (6.1) | $ | (6.3) | $ | (6.3) | |||||||||||
($ millions, except interest rates) | December 31, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||
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 | $ | 20.3 | 5.28 | % | $ | 15.0 | $ | 18.4 | 5.28 | % | |||||||||||||||||||||||
Affiliate note payable with State Auto P&C, issued $85.0, July 2013 with fixed interest | 85.0 | 114.9 | 5.28 | % | 85.0 | 104.4 | 5.28 | % | |||||||||||||||||||||||||||
Total notes payable to affiliates | $ | 100.0 | $ | 135.2 | $ | 100.0 | $ | 122.8 | |||||||||||||||||||||||||||
($ 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, 2020: | |||||||||||||||||||||||||||||
Personal insurance segment | $ | 68.7 | $ | 280.6 | $ | 418.1 | $ | — | $ | 819.0 | |||||||||||||||||||
Commercial insurance segment | 53.4 | 572.2 | 296.9 | — | 561.8 | ||||||||||||||||||||||||
Specialty run-off | — | 173.3 | 0.1 | — | 0.1 | ||||||||||||||||||||||||
Total | $ | 122.2 | $ | 1,026.1 | $ | 715.1 | $ | — | $ | 1,380.9 | |||||||||||||||||||
Year ended December 31, 2019: | |||||||||||||||||||||||||||||
Personal insurance segment | $ | 62.6 | $ | 247.2 | $ | 373.9 | $ | — | $ | 755.9 | |||||||||||||||||||
Commercial insurance segment | 48.3 | 572.0 | 267.5 | — | 488.6 | ||||||||||||||||||||||||
Specialty run-off | 0.2 | 233.7 | 0.3 | — | 5.7 | ||||||||||||||||||||||||
Total | $ | 111.1 | $ | 1,052.9 | $ | 641.7 | $ | — | $ | 1,250.2 | |||||||||||||||||||
Year ended December 31, 2018: | |||||||||||||||||||||||||||||
Personal insurance segment | $ | 59.0 | $ | 240.5 | $ | 340.9 | $ | — | $ | 673.4 | |||||||||||||||||||
Commercial insurance segment | 41.6 | 581.9 | 230.7 | — | 464.4 | ||||||||||||||||||||||||
Specialty run-off | 1.3 | 318.9 | 6.0 | — | 99.8 | ||||||||||||||||||||||||
Total | $ | 101.9 | $ | 1,141.3 | $ | 577.6 | $ | — | $ | 1,237.6 |
($ 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, |
|||||||||||||||||||||||||||||||||||||||||||||||
2020 | $ | 1,067.6 | $ | 39.0 | $ | 1,113.4 | $ | 84.8 | $ | 1,380.9 | $ | 1,380.9 | 6.1 | % | |||||||||||||||||||||||||||||||||
2019 | 976.8 | 31.0 | 1,027.1 | 81.3 | 1,250.2 | 1,250.2 | 6.5 | % | |||||||||||||||||||||||||||||||||||||||
2018 | 881.3 | 23.0 | 919.3 | 61.0 | 1,237.6 | 1,237.6 | 4.9 | % | |||||||||||||||||||||||||||||||||||||||
(1) | These columns include the effect of intercompany pooling. | ||||||||||||||||||||||||||||||||||||||||||||||
(2) | Calculated as earned premiums assumed from outside companies to net amount. | ||||||||||||||||||||||||||||||||||||||||||||||
/s/ PricewaterhouseCoopers LLP | ||||||||
Columbus, Ohio | ||||||||
March 10, 2021 | ||||||||
/s/ Ernst & Young LLP | ||||||||
Grandview Heights, Ohio | ||||||||
March 10, 2021 | ||||||||
Date: March 10, 2021 | |||||
/s/ Michael E. LaRocco | |||||
Michael E. LaRocco, Chief Executive Officer | |||||
Chief Executive Officer
(Principal Executive Officer)
|
Date: March 10, 2021 | |||||
/s/ Steven E. English | |||||
Steven E. English, | |||||
Chief Financial Officer
(Principal Financial Officer)
|
/s/ Michael E. LaRocco | |||||
Michael E. LaRocco | |||||
Chief Executive Officer | |||||
March 10, 2021 |
/s/ Steven E. English | |||||
Steven E. English | |||||
Chief Financial Officer | |||||
March 10, 2021 |