Healthy rate increases and new business helped State Auto Financial Corp. eke out a small profit in the 2020 second quarter. Overall results, however, were mixed with underwriting operations losing money.
The Ohio-based property/casualty auto and home insurer booked $34.3 million in net income or $0.74 per diluted share, versus a loss of $6.2 million, or $0.14 per diluted share over the 2019 second quarter.
Catastrophe losses during the quarter reached $90.4 million, compared to $47.4 million a year ago. State Auto blamed severe wind and hail events in the South and Midwest, noting that 60 percent of the catastrophe losses affected its homeowners lines of business.
State Auto said its personal and commercial segments’ combined ratio for Q2 2020 was 111.5, compared to 109.9 million in Q2 2019. The insurer said that catastrophe losses accounted for 26.5 points of the 77.9 total loss ratio points.
Other Q2 result highlights:
- Net written premium grew nearly 12 percent compared to the same period in 2019. By segment, personal and commercial premiums grew 10 percent and 14.7 percent, respectively.
- State Auto credited new business and rate hikes in homeowners and other personal with the personal rate hikes, partially offset by a dip in net premiums written in personal auto due to a decline in new business.
- Commercial lines saw a large rate hike due to new business, plus rate increases in commercial auto, middle market commercial and farm & ranch. Workers comp saw premium declines due to COVID-19 and heavy competition, offsetting some of the commercial gains.
- Consolidated net premiums written landed at $381.6 million, up from $341.7 million in Q2 2019.
- Net investment income hit $17.7 million in Q2, compared to $21.7 million in Q2 2019.
Source: State Auto