EXHIBIT 99.1
 |  |
State Auto Financial reports first quarter 2020 results
•Quarterly loss of $2.62 per share
•Quarterly net loss from operations1 of $0.18 per share
•Quarterly GAAP combined ratio of 107.2
•Return on equity of (8.7)%
•Book value per share of $19.83
COLUMBUS, OHIO - May 6, 2020 - State Auto Financial Corporation (NASDAQ:STFC) today reported a first quarter 2020 net loss of $114.6 million, or $2.62 per diluted share, compared to net income of $49.4 million, or $1.12 per diluted share, for the same 2019 period. Net loss from operations1 per diluted share for the first quarter of 2020 was $0.18 versus net income from operations per diluted share of $0.31 for the same 2019 period.
GAAP Operating Results
STFC’s GAAP combined ratio for the first quarter 2020 was 107.2 compared to 99.7 for the same 2019 period. Catastrophe losses during the first quarter 2020 accounted for 12.7 points of the 72.4 total loss ratio points, or $41.9 million, versus 5.9 points of the 64.2 total loss ratio points, or $17.7 million, for the same period in 2019. First quarter 2020 was impacted by a severe wind and hail storm, including tornadoes, in Tennessee that contributed 8.3 points to the first quarter loss and ALAE ratio, of which 4.6 points were from three commercial losses in Nashville.
Non-catastrophe losses and ALAE during the first quarter 2020 included 3.2 points of favorable development relating to prior years, or $10.5 million, versus 6.9 points of favorable development, or $20.9 million, for the same period in 2019.
SAP Personal and Commercial Operating Results
Net written premium for the first quarter 2020 increased 13.4% compared to the same period in 2019. By insurance segment, net written premium for the personal and commercial segments increased 10.5% and 17.6%, respectively. The increase in the personal segment was primarily due to new business growth and rate increases in homeowners and other personal. The improvement was partially offset by a decrease in net written premiums in personal auto due to declines in new business and retention. The increase in the commercial segment was led by new business growth and rate increases in commercial auto and middle market commercial. The improvement was partially offset by a decrease in net written premiums in workers’ compensation due to continued intense competition in this market.
The SAP personal and commercial segments' combined ratio2 for the first quarter 2020 was 107.3 compared to 99.7 for the same 2019 period. Catastrophe losses during the first quarter 2020 accounted for 12.7 points of the 72.5 total loss ratio points, or $41.8 million, versus 5.8 points of the 63.6 total loss ratio points, or $17.2 million, for the same period in 2019. Non-catastrophe losses and ALAE during the first quarter 2020 included 3.2 points of favorable development relating to prior years, or $10.4 million, versus 7.4 points of favorable development, or $22.2 million, for the same period in 2019.
The exit from our specialty insurance business resulted in the elimination of specialty insurance as a reportable segment as it is no longer material to our results. Specialty results, labeled as "specialty run-off," are included in the SAP Insurance Segment Results table below to enable reconciliation to total underwriting results.
Book Value and Return on Equity
STFC’s book value decreased to $19.83 per share as of March 31, 2020, compared to $22.01 on Dec. 31, 2019. The decrease in book value was driven by the decline in the market value of our equity securities and other invested assets.
Return on stockholders’ equity for the 12 months ended March 31, 2020, was (8.7)% compared to 7.5% for the 12 months ended March 31, 2019.
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STFC’s Chairman, President and CEO Mike LaRocco commented on the quarter as follows:
"The COVID-19 pandemic is a test unlike any we’ve faced, as a society and as an insurance industry. Our number one priority is the health and safety of our associates, customers, and agents. I’m enormously proud of the focus and dedication of the State Auto team, which seamlessly moved to almost entirely working from home in a matter of days. It’s a transition that wasn’t even noticed by our policyholders and agents thanks to a culture that made it possible, and investments in technology over the past five years that have made us a leading digital provider of insurance. Our independent agent partners continue to quote, sell and service their books of business uninterrupted through our State Auto Connect digital platform, and customers are served through our Customer Connect portal and the outstanding work of our customer service teams.
"Our 'In This Together' plan, which we announced in April and is pending regulatory approval, will provide a 5% discount on our personal auto policyholders’ premium at their next renewal. This plan properly recognizes both the reduction of miles driven and the likelihood that the impact of the pandemic will not be short-lived. In addition, we continue to encourage enrollment in our usage-based telematics program, and we have seen a marked increase.
"From the very early days of the pandemic, we’ve been working with customers in need of flexibility when it comes to payments and payment plans, and we’ll continue to support them, our agents, associates and communities through this challenge in the months ahead.
"While the pandemic has rightly had much of our attention, first quarter 2020 also demonstrated the exceptional value our Claims and Risk Engineering (CARE) professionals deliver to our customers when they need it most. We were in Nashville within hours of the tornado that tore through the area on March 3. Three large commercial losses totaling 4.6 points drove the higher than anticipated catastrophe loss ratio of 12.7%, versus our five-year average first quarter cat loss ratio of 5.2%.
"In personal lines, we continued progress in our largest line, personal auto, toward improved growth and profitability with the launch of new rates and an updated telematics program that makes it even easier for policyholders to save money through safer driving. Strong growth in our homeowners business continued, with a net written premium increase of 26.7%.
"In commercial lines, the three large Nashville losses drove the poor profit result. However, overall positive momentum in commercial continued in the first quarter. Every line other than workers’ compensation grew, with overall 17.6% net written premium growth for commercial lines. Connect CPP (middle market commercial) launched in March, drawing positive feedback from agents on the efficiency of the platform and overall flexibility of the product. Connect Farm & Ranch launched in February, including three new states and two existing states, fueling nearly 20% growth.
"While the challenges we faced in first quarter 2020 were significant, this was yet another quarter in which there’s clear evidence of our continued progress toward sustained profit and growth. Our investments in technology that began five years ago are paying off, and we’re seeing similar benefits from more recent investments. Areas that we knew needed attention and we focused on are showing signs of improvement. Our rebuilding of State Auto has yielded many benefits, including the ability to navigate the kind of adversity we all face today with confidence. This 99-year-old company has faced significant challenges before, and I am confident that State Auto will rise to this challenge."
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About State Auto Financial Corporation
State Auto Financial Corporation, headquartered in Columbus, Ohio, is a super regional property and casualty insurance holding company. STFC stock is traded on the Nasdaq Global Select Market, which represents the top fourth of all Nasdaq listed companies.
The insurance subsidiaries of State Auto Financial Corporation are part of the State Auto Group. The State Auto Group markets its insurance products throughout the United States, through independent insurance agencies. The State Auto Group is rated A- (Excellent) by the A.M. Best Company and includes State Automobile Mutual, State Auto Property & Casualty, State Auto Ohio, State Auto Wisconsin, Milbank, Meridian Security, Patrons Mutual, Rockhill Insurance, Plaza Insurance, American Compensation and Bloomington Compensation. Additional information on State Auto Financial Corporation and the State Auto Insurance Companies can be found online at http://www.StateAuto.com/STFC.
STFC has scheduled a conference call with interested investors for Wednesday, May 6, at 11 a.m. ET to discuss the Company’s first quarter 2020 performance. Live and archived broadcasts of the call can be accessed at http://www.StateAuto.com/STFC. A replay of the call can be heard beginning at 2 p.m., May 6, by calling 855-859-2056, conference ID 3644248. Supplemental schedules detailing the Company’s first quarter 2020 financial, sales and underwriting results are made available on http://www.StateAuto.com/STFC prior to the conference call.
1 Net earnings (loss) from operations, a non-GAAP financial measure which management believes is informative to Company management and investors, differs from GAAP net income (loss) only by the exclusion of net investment gain (loss), net of applicable taxes, on investment activity for the periods being reported. For STFC, this amounted to a loss of $2.44 per diluted share for the first quarter of 2020 versus income of $0.81 per diluted share for the first quarter 2019.
2 Insurance industry regulators require STFC's insurance subsidiaries to report their financial condition and results of operations using Statutory Accounting Practices ("SAP"). The SAP personal and commercial segments' combined ratio is a measure used by management to evaluate STFC’s operating performance for its ongoing operations. Details behind the compilation of these results can be found on pages 15 - 16 of this release.
* * * * *
Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in State Auto Financial's Form 10-K and Form 10-Q reports and exhibits to those reports, and include (but are not limited to) legislative changes at both the state and federal level, state and federal regulatory rule making promulgations and adjudications, class action litigation involving the insurance industry and judicial decisions affecting claims, policy coverages and the general costs of doing business, the impact of competition on products and pricing, inflation in the costs of the products and services insurance pays for, product development, geographic spread of risk, weather and weather-related events, and other types of catastrophic events. State Auto Financial undertakes no obligation to update or revise any forward-looking statements.
| State Auto Financial Corporation |
| Media contact: |
| Kyle Anderson, 614-917-5497 |
| Kyle.Anderson@StateAuto.com |
| or |
| Investor contact: |
| Natalie Schoolcraft, 614-917-4341 |
| Natalie.Schoolcraft@StateAuto.com |
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STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Selected Consolidated Financial Data | ||||||||
| ($ in millions, except per share amounts) | ||||||||
| (unaudited) | Three months ended March 31 | |||||||
| 2020 | 2019 | |||||||
| Net premiums written | $ | 346.5 | $ | 306.0 | ||||
| Earned premiums | 330.5 | 302.7 | ||||||
| Net investment income | 18.9 | 19.4 | ||||||
| Net investment (loss) gain | (135.2 | ) | 44.9 | |||||
| Other income | 0.6 | 0.6 | ||||||
| Total revenue | 214.8 | 367.6 | ||||||
| (Loss) income before federal income taxes | (144.0 | ) | 61.6 | |||||
| Federal tax (benefit) expense | (29.4 | ) | 12.2 | |||||
| Net (loss) income | $ | (114.6 | ) | $ | 49.4 | |||
| (Loss) earnings per common share: | ||||||||
| - basic | $ | (2.62 | ) | $ | 1.14 | |||
| - diluted | $ | (2.62 | ) | $ | 1.12 | |||
(Loss) earnings per share from operations(A): | ||||||||
| - basic | $ | (0.18 | ) | $ | 0.32 | |||
| - diluted | $ | (0.18 | ) | $ | 0.31 | |||
| Weighted average shares outstanding: | ||||||||
| - basic | 43.7 | 43.3 | ||||||
| - diluted | 43.7 | 43.9 | ||||||
| Return on average equity (LTM) | (8.7 | )% | 7.5 | % | ||||
| Book value per share | $ | 19.83 | $ | 20.67 | ||||
| Dividends paid per share | $ | 0.10 | $ | 0.10 | ||||
| Total shares outstanding | 43.7 | 43.3 | ||||||
| GAAP ratios: | ||||||||
| Cat loss and ALAE ratio | 12.7 | 5.9 | ||||||
| Non-cat loss and LAE ratio | 59.7 | 58.3 | ||||||
| Loss and LAE ratio | 72.4 | 64.2 | ||||||
| Expense ratio | 34.8 | 35.5 | ||||||
| Combined ratio | 107.2 | 99.7 | ||||||
(A) Reconciliation of non-GAAP financial measure: | ||||||||
| Net (loss) income from operations: | ||||||||
| Net (loss) income | $ | (114.6 | ) | $ | 49.4 | |||
| Net investment (loss) gain, net of tax | (106.8 | ) | 35.8 | |||||
| Net (loss) income from operations | $ | (7.8 | ) | $ | 13.6 | |||
Page 4 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Condensed Consolidated Balance Sheets | ||||||||
| ($ and shares in millions, except per share amounts) | ||||||||
| (unaudited) | March 31 | December 31 | ||||||
| 2020 | 2019 | |||||||
| ASSETS | ||||||||
| Fixed maturities, available-for-sale, at fair value (amortized cost $2,051.8 and $2,080.0, respectively) | $ | 2,128.3 | $ | 2,127.9 | ||||
| Equity securities | 275.7 | 395.2 | ||||||
| Other invested assets | 54.6 | 69.7 | ||||||
| Other invested assets, at cost | 12.5 | 6.5 | ||||||
| Notes receivable from affiliate | 70.0 | 70.0 | ||||||
| Total investments | 2,541.1 | 2,669.3 | ||||||
| Cash and cash equivalents | 126.6 | 78.0 | ||||||
| Accrued investment income and other assets | 33.2 | 31.7 | ||||||
| Deferred policy acquisition costs | 113.3 | 111.1 | ||||||
| Reinsurance recoverable on losses and loss expenses payable | 39.7 | 13.6 | ||||||
| Prepaid reinsurance premiums | 7.9 | 7.5 | ||||||
| Due from affiliate | 22.5 | 21.5 | ||||||
| Current federal income taxes | 6.7 | 6.3 | ||||||
| Net deferred federal income taxes | 64.9 | 42.2 | ||||||
| Property and equipment, held for sale | 4.2 | 4.2 | ||||||
| Total assets | $ | 2,960.1 | $ | 2,985.4 | ||||
| LIABILITIES | ||||||||
| Losses and loss expenses payable | $ | 1,086.6 | $ | 1,066.5 | ||||
| Unearned premiums | 665.7 | 649.2 | ||||||
| Notes payable (affiliates $15.2 and $15.2, respectively) | 182.1 | 122.0 | ||||||
| Pension and postretirement benefits | 71.5 | 72.9 | ||||||
| Other liabilities | 87.5 | 114.9 | ||||||
| Total liabilities | 2,093.4 | 2,025.5 | ||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, without par value. Authorized 100.0 shares; 50.6 and 50.4 shares issued, respectively, at stated value of $2.50 per share | 126.5 | 125.9 | ||||||
| Treasury stock, 6.9 and 6.9 shares, respectively, at cost | (118.4 | ) | (117.5 | ) | ||||
| Additional paid-in capital | 209.1 | 206.7 | ||||||
| Accumulated other comprehensive loss | (13.7 | ) | (37.9 | ) | ||||
| Retained earnings | 663.2 | 782.7 | ||||||
| Total stockholders' equity | 866.7 | 959.9 | ||||||
| Total liabilities and stockholders' equity | $ | 2,960.1 | $ | 2,985.4 | ||||
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STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Condensed Consolidated Statements of Income | ||||||||
| ($ in millions, except per share amounts) | ||||||||
| (unaudited) | Three months ended March 31 | |||||||
| 2020 | 2019 | |||||||
| Earned premiums | $ | 330.5 | $ | 302.7 | ||||
| Net investment income | 18.9 | 19.4 | ||||||
| Net investment (loss) gain | (135.2 | ) | 44.9 | |||||
| Other income from affiliates | 0.6 | 0.6 | ||||||
| Total revenues | 214.8 | 367.6 | ||||||
| Losses and loss expenses | 239.4 | 194.3 | ||||||
| Acquisition and operating expenses | 114.9 | 107.6 | ||||||
| Interest expense | 1.2 | 1.2 | ||||||
| Other expenses | 3.3 | 2.9 | ||||||
| Total expenses | 358.8 | 306.0 | ||||||
| (Loss) income before federal income taxes | (144.0 | ) | 61.6 | |||||
| Federal income tax (benefit) expense: | ||||||||
| Current | — | (0.4 | ) | |||||
| Deferred | (29.4 | ) | 12.6 | |||||
| Federal income tax (benefit) expense | (29.4 | ) | 12.2 | |||||
| Net (loss) income | $ | (114.6 | ) | $ | 49.4 | |||
| (Loss) earnings per common share: | ||||||||
| Basic | $ | (2.62 | ) | $ | 1.14 | |||
| Diluted | $ | (2.62 | ) | $ | 1.12 | |||
| Dividends paid per common share | $ | 0.10 | $ | 0.10 | ||||
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STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Consolidated Statements of Comprehensive (Loss) Income | |||||||
| ($ in millions) | |||||||
| (unaudited) | Three months ended March 31 | ||||||
| 2020 | 2019 | ||||||
| Net (loss) income | $ | (114.6 | ) | $ | 49.4 | ||
| Other comprehensive income (loss), net of tax: | |||||||
| Net unrealized holding gain on available-for-sale investments: | |||||||
| Unrealized holding gain | 31.0 | 34.5 | |||||
| Reclassification adjustments for gains realized in net income | (2.4 | ) | (0.1 | ) | |||
| Income tax expense | (6.0 | ) | (7.2 | ) | |||
| Total net unrealized holding gain on available- for-sale investments | 22.6 | 27.2 | |||||
| Net unrecognized benefit plan obligations: | |||||||
| Reclassification adjustments for amortization to statements of income: | |||||||
| Prior service credit | (1.6 | ) | (1.6 | ) | |||
| Net actuarial loss | 3.7 | 2.4 | |||||
| Income tax expense | (0.5 | ) | (0.2 | ) | |||
| Total net unrecognized benefit plan obligations | 1.6 | 0.6 | |||||
| Other comprehensive income | 24.2 | 27.8 | |||||
| Comprehensive (loss) income | $ | (90.4 | ) | $ | 77.2 | ||
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STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Condensed Consolidated Statement of Stockholders' Equity | ||||||||
| ($ and shares in millions) | ||||||||
| (unaudited) | Three Months Ended | Year Ended | ||||||
| March 31 | December 31 | |||||||
| 2020 | 2019 | |||||||
| Common shares: | ||||||||
| Balance at beginning of year | 50.4 | 50.0 | ||||||
| Issuance of shares | 0.2 | 0.4 | ||||||
| Balance at period ended | 50.6 | 50.4 | ||||||
| Treasury shares: | ||||||||
| Balance at beginning of year | (6.9 | ) | (6.8 | ) | ||||
| Shares acquired on stock award exercises and vested restricted shares | — | (0.1 | ) | |||||
| Balance at period ended | (6.9 | ) | (6.9 | ) | ||||
| Common stock: | ||||||||
| Balance at beginning of year | $ | 125.9 | $ | 125.0 | ||||
| Issuance of shares | 0.6 | 0.9 | ||||||
| Balance at period ended | 126.5 | 125.9 | ||||||
| Treasury stock: | ||||||||
| Balance at beginning of year | $ | (117.5 | ) | $ | (117.0 | ) | ||
| Shares acquired on stock award exercises and vested restricted shares | (0.9 | ) | (0.5 | ) | ||||
| Balance at beginning of year and period ended | (118.4 | ) | (117.5 | ) | ||||
| Additional paid-in capital: | ||||||||
| Balance at beginning of year | $ | 206.7 | $ | 194.2 | ||||
| Issuance of common stock | 1.3 | 5.1 | ||||||
| Stock awards granted | 1.1 | 7.4 | ||||||
| Balance at period ended | 209.1 | 206.7 | ||||||
| Accumulated other comprehensive loss: | ||||||||
| Balance at beginning of the year | $ | (37.9 | ) | $ | (96.4 | ) | ||
| Total net unrealized holding gain on available-for-sale investments | 22.6 | 60.6 | ||||||
| Total net unrecognized benefit plan obligations | 1.6 | (2.1 | ) | |||||
| Balance at period ended | (13.7 | ) | (37.9 | ) | ||||
| Retained earnings: | ||||||||
| Balance at beginning of year | $ | 782.7 | $ | 712.7 | ||||
| Cumulative effect of change in accounting to establish an allowance for expected credit losses at January 1, 2020 | (0.5 | ) | — | |||||
| Net (loss) income | (114.6 | ) | 87.4 | |||||
| Cash dividends paid | (4.4 | ) | (17.4 | ) | ||||
| Balance at period ended | 663.2 | 782.7 | ||||||
| Total stockholders' equity at period ended | $ | 866.7 | $ | 959.9 | ||||
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STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Condensed Consolidated Statements of Cash Flow | ||||||||
| ($ in millions) | ||||||||
| (unaudited) | Three months ended | |||||||
| March 31 | ||||||||
| 2020 | 2019 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | $ | (114.6 | ) | $ | 49.4 | |||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization, net | 1.6 | 3.1 | ||||||
| Share-based compensation | 0.5 | 3.8 | ||||||
| Net investment loss (gain) | 135.2 | (44.9 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Deferred policy acquisition costs | (2.2 | ) | (2.4 | ) | ||||
| Accrued investment income and other assets | (1.5 | ) | (4.1 | ) | ||||
| Postretirement and pension benefits | (0.9 | ) | (0.1 | ) | ||||
| Other liabilities and due to/from affiliates, net | (26.2 | ) | (33.6 | ) | ||||
| Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums | (26.5 | ) | 0.8 | |||||
| Losses and loss expenses payable | 19.5 | (17.9 | ) | |||||
| Unearned premiums | 16.5 | 3.3 | ||||||
| Deferred tax expense on share-based awards | (0.2 | ) | 0.2 | |||||
| Federal income taxes | (29.2 | ) | 12.0 | |||||
| Net cash used in operating activities | (28.0 | ) | (30.4 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of fixed maturities available-for-sale | (122.4 | ) | (137.2 | ) | ||||
| Purchases of equity securities | (16.1 | ) | (19.5 | ) | ||||
| Purchases of other invested assets | (6.6 | ) | (1.0 | ) | ||||
| Maturities, calls and pay downs of fixed maturities available-for-sale | 67.9 | 125.9 | ||||||
| Sales of fixed maturities available-for-sale | 83.5 | 65.6 | ||||||
| Sales of equity securities | 13.2 | 12.7 | ||||||
| Sales of other invested assets | 0.4 | 0.3 | ||||||
| Disposals of property and equipment | 0.2 | — | ||||||
| Net cash provided by investing activities | 20.1 | 46.8 | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock | 1.8 | 1.0 | ||||||
| Payments to acquire treasury stock | (0.9 | ) | (0.5 | ) | ||||
| Payment of dividends | (4.4 | ) | (4.4 | ) | ||||
| Proceeds from short-term debt | 60.0 | — | ||||||
| Net cash provided by (used in) financing activities | 56.5 | (3.9 | ) | |||||
| Net increase in cash and cash equivalents | 48.6 | 12.5 | ||||||
| Cash and cash equivalents at beginning of period | 78.0 | 59.8 | ||||||
| Cash and cash equivalents at end of period | $ | 126.6 | $ | 72.3 | ||||
| Supplemental disclosures: | ||||||||
| Interest paid (affiliates $0.2 and $0.2, respectively) | $ | 1.2 | $ | 1.7 | ||||
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STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Net Investment Income | ||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||
| 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | 3/31/2020 | ||||||||||||||||
| Quarter to Date | ||||||||||||||||||||
| Gross investment income: | ||||||||||||||||||||
| Fixed maturities | $ | 15.4 | $ | 14.7 | $ | 14.4 | $ | 13.9 | $ | 14.5 | ||||||||||
| TIPS | (0.3 | ) | 2.6 | 0.9 | 0.7 | 0.6 | ||||||||||||||
| Total fixed maturities | 15.1 | 17.3 | 15.3 | 14.6 | 15.1 | |||||||||||||||
| Equity securities | 2.8 | 3.1 | 3.0 | 4.3 | 3.1 | |||||||||||||||
| Other | 1.7 | 1.4 | 1.1 | 1.3 | 1.0 | |||||||||||||||
| Total gross investment income | 19.6 | 21.8 | 19.4 | 20.2 | 19.2 | |||||||||||||||
| Less: Investment expenses | 0.2 | 0.1 | 0.1 | 0.2 | 0.3 | |||||||||||||||
| Net investment income | $ | 19.4 | $ | 21.7 | $ | 19.3 | $ | 20.0 | $ | 18.9 | ||||||||||
| Year to Date | ||||||||||||||||||||
| Gross investment income: | ||||||||||||||||||||
| Fixed maturities | $ | 15.4 | $ | 30.1 | $ | 44.5 | $ | 58.4 | $ | 14.5 | ||||||||||
| TIPS | (0.3 | ) | 2.3 | 3.2 | 3.9 | 0.6 | ||||||||||||||
| Total fixed maturities | 15.1 | 32.4 | 47.7 | 62.3 | 15.1 | |||||||||||||||
| Equity securities | 2.8 | 5.9 | 8.9 | 13.2 | 3.1 | |||||||||||||||
| Other | 1.7 | 3.1 | 4.2 | 5.5 | 1.0 | |||||||||||||||
| Total gross investment income | 19.6 | 41.4 | 60.8 | 81.0 | 19.2 | |||||||||||||||
| Less: Investment expenses | 0.2 | 0.3 | 0.4 | 0.6 | 0.3 | |||||||||||||||
| Net investment income | $ | 19.4 | $ | 41.1 | $ | 60.4 | $ | 80.4 | $ | 18.9 | ||||||||||
| 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | 3/31/2020 | ||||||||||||||||
| TIPS, fair value | $ | 147.0 | $ | 145.2 | $ | 135.3 | $ | 135.6 | $ | 111.4 | ||||||||||
| TIPS, book value | $ | 140.5 | $ | 137.4 | $ | 125.9 | $ | 126.2 | $ | 101.5 | ||||||||||
| Net Investment (Loss) Gain | |||||||
| ($ in millions) | |||||||
| unaudited | Three months ended March 31 | ||||||
| 2020 | 2019 | ||||||
| Investment gain (loss), net: | |||||||
| Fixed maturities: | |||||||
| Realized gains on sales of securities | 3.6 | 0.1 | |||||
| Realized losses on sales of securities | (1.2 | ) | — | ||||
| Net gain on fixed maturities | 2.4 | 0.1 | |||||
| Equity securities: | |||||||
| Realized gains (losses) on sales of securities, net | 0.9 | (1.9 | ) | ||||
| Unrealized (loss) gain on securities still held, net | (123.3 | ) | 44.1 | ||||
| Net (loss) gain on equity securities | (122.4 | ) | 42.2 | ||||
| Other invested assets: | |||||||
| Unrealized (loss) gain on securities still held, net | (15.4 | ) | 3.9 | ||||
| Net (loss) gain on other invested assets | (15.4 | ) | 3.9 | ||||
| Other net realized gain (loss) | 0.2 | (1.3 | ) | ||||
| Net (loss) gain on investments | $ | (135.2 | ) | $ | 44.9 | ||
Page 10 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| Income Taxes | ||||||||
| ($ in millions) | ||||||||
| (unaudited) | ||||||||
| The following table sets forth the tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities: | ||||||||
| March 31 | December 31 | |||||||
| 2020 | 2019 | |||||||
| Deferred tax assets: | ||||||||
| Unearned premiums not currently deductible | $ | 27.7 | $ | 27.0 | ||||
| Losses and loss expenses payable discounting | 10.8 | 10.6 | ||||||
| Postretirement and pension benefits | 19.6 | 20.0 | ||||||
| Investments | 2.5 | — | ||||||
| Other liabilities | 10.1 | 13.4 | ||||||
| Net operating loss carryforward | 16.9 | 12.1 | ||||||
| Tax credit carryforward | 2.0 | 2.5 | ||||||
| Other | 0.6 | 1.1 | ||||||
| Total deferred tax assets | 90.2 | 86.7 | ||||||
| Deferred tax liabilities: | ||||||||
| Deferral of policy acquisition costs | 23.8 | 23.3 | ||||||
| Investments | — | 21.2 | ||||||
| Other | 1.5 | — | ||||||
| Total deferred tax liabilities | 25.3 | 44.5 | ||||||
| Net deferred federal income taxes | $ | 64.9 | $ | 42.2 | ||||
| The following table sets forth the components of federal income tax (benefit) expense: | ||||||||
| Three months ended March 31 | ||||||||
| 2020 | 2019 | |||||||
| (Loss) income before federal income taxes | $ | (144.0 | ) | $ | 61.6 | |||
| Federal income tax (benefit) expense | ||||||||
| Current | — | (0.4 | ) | |||||
| Deferred | (29.4 | ) | 12.6 | |||||
| Total federal income tax (benefit) expense | (29.4 | ) | 12.2 | |||||
| Net (loss) income | $ | (114.6 | ) | $ | 49.4 | |||
Page 11 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| SAP Personal Insurance Segment Results | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| ($ in millions) | ||||||||||||||||
| Three months ended March 31, 2020 | Personal Auto | Homeowners | Other Personal | Total | ||||||||||||
| Net written premiums | $ | 104.6 | $ | 81.6 | $ | 13.3 | $ | 199.5 | ||||||||
| Net earned premiums | 104.7 | 82.7 | 10.7 | 198.1 | ||||||||||||
| Losses and LAE incurred: | ||||||||||||||||
| Cat loss and ALAE | 0.5 | 10.7 | 1.5 | 12.7 | ||||||||||||
| Non-cat loss and ALAE | ||||||||||||||||
| Prior accident years non-cat loss and ALAE | 5.2 | 2.2 | (1.0 | ) | 6.4 | |||||||||||
| Current accident year non-cat loss and ALAE | 62.0 | 37.6 | 4.3 | 103.9 | ||||||||||||
| Total non-cat loss and ALAE | 67.2 | 39.8 | 3.3 | 110.3 | ||||||||||||
| Total Loss and ALAE | 67.7 | 50.5 | 4.8 | 123.0 | ||||||||||||
| ULAE | 7.3 | 5.3 | 0.4 | 13.0 | ||||||||||||
| Total Loss and LAE | 75.0 | 55.8 | 5.2 | 136.0 | ||||||||||||
| Underwriting expenses | 32.8 | 25.0 | 4.0 | 61.8 | ||||||||||||
| Net underwriting (loss) gain | $ | (3.1 | ) | $ | 1.9 | $ | 1.5 | $ | 0.3 | |||||||
| Cat loss and ALAE ratio | 0.4 | % | 13.0 | % | 14.0 | % | 6.4 | % | ||||||||
| Non-cat loss and ALAE ratio | ||||||||||||||||
| Prior accident years non-cat loss and ALAE ratio | 5.0 | % | 2.7 | % | (9.2 | )% | 3.2 | % | ||||||||
| Current accident year non-cat loss and ALAE ratio | 59.3 | % | 45.4 | % | 40.0 | % | 52.5 | % | ||||||||
| Total non-cat loss and ALAE ratio | 64.3 | % | 48.1 | % | 30.8 | % | 55.7 | % | ||||||||
| Total Loss and ALAE ratio | 64.7 | % | 61.1 | % | 44.8 | % | 62.1 | % | ||||||||
| ULAE ratio | 6.9 | % | 6.4 | % | 4.0 | % | 6.5 | % | ||||||||
| Total Loss and LAE ratio | 71.6 | % | 67.5 | % | 48.8 | % | 68.6 | % | ||||||||
| Expense ratio | 31.4 | % | 30.6 | % | 30.0 | % | 31.0 | % | ||||||||
| Combined ratio | 103.0 | % | 98.1 | % | 78.8 | % | 99.6 | % | ||||||||
| ($ in millions) | ||||||||||||||||
| Three months ended March 31, 2019 | Personal Auto | Homeowners | Other Personal | Total | ||||||||||||
| Net written premiums | $ | 107.7 | $ | 64.4 | $ | 8.4 | $ | 180.5 | ||||||||
| Net earned premiums | 105.4 | 68.7 | 7.4 | 181.5 | ||||||||||||
| Losses and LAE incurred: | ||||||||||||||||
| Cat loss and ALAE | 0.9 | 12.4 | 0.7 | 14.0 | ||||||||||||
| Non-cat loss and ALAE | ||||||||||||||||
| Prior accident years non-cat loss and ALAE | (6.8 | ) | 0.6 | (0.7 | ) | (6.9 | ) | |||||||||
| Current accident year non-cat loss and ALAE | 65.8 | 29.9 | 4.4 | 100.1 | ||||||||||||
| Total non-cat loss and ALAE | 59.0 | 30.5 | 3.7 | 93.2 | ||||||||||||
| Total Loss and ALAE | 59.9 | 42.9 | 4.4 | 107.2 | ||||||||||||
| ULAE | 7.2 | 5.2 | 0.3 | 12.7 | ||||||||||||
| Total Loss and LAE | 67.1 | 48.1 | 4.7 | 119.9 | ||||||||||||
| Underwriting expenses | 32.7 | 21.8 | 2.9 | 57.4 | ||||||||||||
| Net underwriting gain (loss) | $ | 5.6 | $ | (1.2 | ) | $ | (0.2 | ) | $ | 4.2 | ||||||
| Cat loss and ALAE ratio | 0.8 | % | 18.1 | % | 9.6 | % | 7.7 | % | ||||||||
| Non-cat loss and ALAE ratio | ||||||||||||||||
| Prior accident years non-cat loss and ALAE ratio | (6.5 | )% | 0.9 | % | (8.9 | )% | (3.8 | )% | ||||||||
| Current accident year non-cat loss and ALAE ratio | 62.4 | % | 43.6 | % | 58.6 | % | 55.2 | % | ||||||||
| Total non-cat loss and ALAE ratio | 55.9 | % | 44.5 | % | 49.7 | % | 51.4 | % | ||||||||
| Total Loss and ALAE ratio | 56.7 | % | 62.6 | % | 59.3 | % | 59.1 | % | ||||||||
| ULAE ratio | 6.8 | % | 7.5 | % | 4.1 | % | 7.0 | % | ||||||||
| Total Loss and LAE ratio | 63.5 | % | 70.1 | % | 63.4 | % | 66.1 | % | ||||||||
| Expense ratio | 30.4 | % | 33.7 | % | 34.6 | % | 31.8 | % | ||||||||
| Combined ratio | 93.9 | % | 103.8 | % | 98.0 | % | 97.9 | % | ||||||||
Page 12 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| SAP Commercial Insurance Segment Results | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| ($ in millions) | ||||||||||||||||||||||||||||
| Three months ended March 31, 2020 | Commercial Auto | Small Commercial Package | Middle Market Commercial | Workers' Comp | Farm & Ranch | Other Commercial | Total | |||||||||||||||||||||
| Net written premiums | $ | 36.4 | $ | 31.9 | $ | 40.3 | $ | 18.8 | $ | 14.8 | $ | 4.9 | $ | 147.1 | ||||||||||||||
| Net earned premiums | 29.0 | 30.3 | 36.1 | 19.7 | 12.6 | 4.7 | 132.4 | |||||||||||||||||||||
| Losses and LAE incurred: | ||||||||||||||||||||||||||||
| Cat loss and ALAE | 0.3 | 3.6 | 24.1 | — | 0.9 | 0.2 | 29.1 | |||||||||||||||||||||
| Non-cat loss and ALAE | ||||||||||||||||||||||||||||
| Prior accident years non-cat loss and ALAE | (0.1 | ) | (5.4 | ) | (5.1 | ) | (4.0 | ) | (0.8 | ) | (1.4 | ) | (16.8 | ) | ||||||||||||||
| Current accident year non-cat loss and ALAE | 16.6 | 19.1 | 27.5 | 13.4 | 4.0 | 3.0 | 83.6 | |||||||||||||||||||||
| Total non-cat loss and ALAE | 16.5 | 13.7 | 22.4 | 9.4 | 3.2 | 1.6 | 66.8 | |||||||||||||||||||||
| Total Loss and ALAE | 16.8 | 17.3 | 46.5 | 9.4 | 4.1 | 1.8 | 95.9 | |||||||||||||||||||||
| ULAE | 1.5 | 1.6 | 2.1 | 1.7 | 0.5 | 0.2 | 7.6 | |||||||||||||||||||||
| Total Loss and LAE | 18.3 | 18.9 | 48.6 | 11.1 | 4.6 | 2.0 | 103.5 | |||||||||||||||||||||
| Underwriting expenses | 12.7 | 11.8 | 16.7 | 8.9 | 6.7 | 2.1 | 58.9 | |||||||||||||||||||||
| Net underwriting (loss) gain | $ | (2.0 | ) | $ | (0.4 | ) | $ | (29.2 | ) | $ | (0.3 | ) | $ | 1.3 | $ | 0.6 | $ | (30.0 | ) | |||||||||
| Cat loss and ALAE ratio | 1.1 | % | 12.0 | % | 66.7 | % | — | % | 7.3 | % | 3.8 | % | 22.0 | % | ||||||||||||||
| Non-cat loss and ALAE ratio | ||||||||||||||||||||||||||||
| Prior accident years non-cat loss and ALAE ratio | (0.3 | )% | (17.8 | )% | (14.2 | )% | (20.5 | )% | (6.4 | )% | (29.9 | )% | (12.7 | )% | ||||||||||||||
| Current accident year non-cat loss and ALAE ratio | 57.2 | % | 62.8 | % | 76.4 | % | 68.2 | % | 31.6 | % | 63.9 | % | 63.1 | % | ||||||||||||||
| Total non-cat loss and ALAE ratio | 56.9 | % | 45.0 | % | 62.2 | % | 47.7 | % | 25.2 | % | 34.0 | % | 50.4 | % | ||||||||||||||
| Total Loss and ALAE ratio | 58.0 | % | 57.0 | % | 128.9 | % | 47.7 | % | 32.5 | % | 37.8 | % | 72.4 | % | ||||||||||||||
| ULAE ratio | 5.2 | % | 5.3 | % | 5.8 | % | 8.9 | % | 3.9 | % | 4.0 | % | 5.8 | % | ||||||||||||||
| Total Loss and LAE ratio | 63.2 | % | 62.3 | % | 134.7 | % | 56.6 | % | 36.4 | % | 41.8 | % | 78.2 | % | ||||||||||||||
| Expense ratio | 35.0 | % | 37.0 | % | 41.4 | % | 47.7 | % | 45.5 | % | 41.7 | % | 40.1 | % | ||||||||||||||
| Combined ratio | 98.2 | % | 99.3 | % | 176.1 | % | 104.3 | % | 81.9 | % | 83.5 | % | 118.3 | % | ||||||||||||||
Page 13 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| ($ in millions) | ||||||||||||||||||||||||||||
| Three months ended March 31, 2019 | Commercial Auto | Small Commercial Package | Middle Market Commercial | Workers' Comp | Farm & Ranch | Other Commercial | Total | |||||||||||||||||||||
| Net written premiums | $ | 24.0 | $ | 30.5 | $ | 34.2 | $ | 19.5 | $ | 12.4 | $ | 4.5 | $ | 125.1 | ||||||||||||||
| Net earned premiums | 19.7 | 29.6 | 30.7 | 20.5 | 11.8 | 4.1 | 116.4 | |||||||||||||||||||||
| Losses and LAE incurred: | ||||||||||||||||||||||||||||
| Cat loss and ALAE | 0.1 | 1.5 | 1.3 | — | 0.3 | — | 3.2 | |||||||||||||||||||||
| Non-cat loss and ALAE | ||||||||||||||||||||||||||||
| Prior accident years non-cat loss and ALAE | (1.5 | ) | (4.8 | ) | (3.1 | ) | (4.5 | ) | (0.4 | ) | (1.0 | ) | (15.3 | ) | ||||||||||||||
| Current accident year non-cat loss and ALAE | 11.9 | 15.9 | 26.0 | 13.6 | 5.1 | 2.1 | 74.6 | |||||||||||||||||||||
| Total non-cat loss and ALAE | 10.4 | 11.1 | 22.9 | 9.1 | 4.7 | 1.1 | 59.3 | |||||||||||||||||||||
| Total Loss and ALAE | 10.5 | 12.6 | 24.2 | 9.1 | 5.0 | 1.1 | 62.5 | |||||||||||||||||||||
| ULAE | 1.3 | 1.8 | 1.3 | 1.6 | 0.6 | 0.2 | 6.8 | |||||||||||||||||||||
| Total Loss and LAE | 11.8 | 14.4 | 25.5 | 10.7 | 5.6 | 1.3 | 69.3 | |||||||||||||||||||||
| Underwriting expenses | 10.7 | 12.5 | 14.2 | 7.4 | 6.2 | 2.0 | 53.0 | |||||||||||||||||||||
| Net underwriting (loss) gain | $ | (2.8 | ) | $ | 2.7 | $ | (9.0 | ) | $ | 2.4 | $ | — | $ | 0.8 | $ | (5.9 | ) | |||||||||||
| Cat loss and ALAE ratio | 0.4 | % | 5.1 | % | 4.3 | % | — | % | 2.2 | % | — | % | 2.7 | % | ||||||||||||||
| Non-cat loss and ALAE ratio | ||||||||||||||||||||||||||||
| Prior accident years non-cat loss and ALAE ratio | (7.3 | )% | (16.2 | )% | (10.2 | )% | (22.0 | )% | (3.7 | )% | (23.5 | )% | (13.1 | )% | ||||||||||||||
| Current accident year non-cat loss and ALAE ratio | 60.2 | % | 53.8 | % | 84.7 | % | 66.4 | % | 43.0 | % | 52.6 | % | 64.1 | % | ||||||||||||||
| Total non-cat loss and ALAE ratio | 52.9 | % | 37.6 | % | 74.5 | % | 44.4 | % | 39.3 | % | 29.1 | % | 51.0 | % | ||||||||||||||
| Total Loss and ALAE ratio | 53.3 | % | 42.7 | % | 78.8 | % | 44.4 | % | 41.5 | % | 29.1 | % | 53.7 | % | ||||||||||||||
| ULAE ratio | 6.6 | % | 6.1 | % | 4.2 | % | 8.1 | % | 5.0 | % | 4.4 | % | 5.9 | % | ||||||||||||||
| Total Loss and LAE ratio | 59.9 | % | 48.8 | % | 83.0 | % | 52.5 | % | 46.5 | % | 33.5 | % | 59.6 | % | ||||||||||||||
| Expense ratio | 44.8 | % | 41.0 | % | 41.5 | % | 37.9 | % | 50.0 | % | 44.6 | % | 42.4 | % | ||||||||||||||
| Combined ratio | 104.7 | % | 89.8 | % | 124.5 | % | 90.4 | % | 96.5 | % | 78.1 | % | 102.0 | % | ||||||||||||||
Page 14 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| SAP Insurance Segment Results | ||||||||||||
| (unaudited) | ||||||||||||
| ($ in millions) | ||||||||||||
| Three months ended March 31, 2020 | Personal & Commercial | Specialty run-off | Total | |||||||||
| Net written premiums | $ | 346.6 | $ | (0.1 | ) | $ | 346.5 | |||||
| Net earned premiums | 330.5 | — | 330.5 | |||||||||
| Losses and LAE incurred: | ||||||||||||
| Cat loss and ALAE | 41.8 | 0.1 | 41.9 | |||||||||
| Non-cat loss and ALAE | ||||||||||||
| Prior accident years non-cat loss and ALAE | (10.4 | ) | (0.1 | ) | (10.5 | ) | ||||||
| Current accident year non-cat loss and ALAE | 187.5 | 0.1 | 187.6 | |||||||||
| Total non-cat loss and ALAE | 177.1 | — | 177.1 | |||||||||
| Total Loss and ALAE | 218.9 | 0.1 | 219.0 | |||||||||
| ULAE | 20.6 | — | 20.6 | |||||||||
| Total Loss and LAE | 239.5 | 0.1 | 239.6 | |||||||||
| Underwriting expenses | 120.7 | 0.3 | 121.0 | |||||||||
| Net underwriting loss | $ | (29.7 | ) | $ | (0.4 | ) | $ | (30.1 | ) | |||
| Cat loss and ALAE ratio | 12.7 | % | N/M(1) | 12.7 | % | |||||||
| Non-cat loss and ALAE ratio | ||||||||||||
| Prior accident years non-cat loss and ALAE ratio | (3.2 | )% | N/M | (3.2 | )% | |||||||
| Current accident year non-cat loss and ALAE ratio | 56.8 | % | N/M | 56.8 | % | |||||||
| Total non-cat loss and ALAE ratio | 53.6 | % | N/M | 53.6 | % | |||||||
| Total Loss and ALAE ratio | 66.3 | % | N/M | 66.3 | % | |||||||
| ULAE ratio | 6.2 | % | N/M | 6.2 | % | |||||||
| Total Loss and LAE ratio | 72.5 | % | N/M | 72.5 | % | |||||||
| Expense ratio | 34.8 | % | N/M | 34.9 | % | |||||||
| Combined ratio | 107.3 | % | N/M | 107.4 | % | |||||||
(1) N/M = Not Meaningful | ||||||||||||
Page 15 of 16
STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES
| ($ in millions) | ||||||||||||
| Three months ended March 31, 2019 | Personal & Commercial | Specialty run-off | Total | |||||||||
| Net written premiums | $ | 305.6 | $ | 0.4 | $ | 306.0 | ||||||
| Net earned premiums | 297.9 | 4.8 | 302.7 | |||||||||
| Losses and LAE incurred: | ||||||||||||
| Cat loss and ALAE | 17.2 | 0.5 | 17.7 | |||||||||
| Non-cat loss and ALAE | ||||||||||||
| Prior accident years non-cat loss and ALAE | (22.2 | ) | 1.3 | (20.9 | ) | |||||||
| Current accident year non-cat loss and ALAE | 174.7 | 4.0 | 178.7 | |||||||||
| Total non-cat loss and ALAE | 152.5 | 5.3 | 157.8 | |||||||||
| Total Loss and ALAE | 169.7 | 5.8 | 175.5 | |||||||||
| ULAE | 19.5 | (0.4 | ) | 19.1 | ||||||||
| Total Loss and LAE | 189.2 | 5.4 | 194.6 | |||||||||
| Underwriting expenses | 110.4 | 0.8 | 111.2 | |||||||||
| Net underwriting loss | $ | (1.7 | ) | $ | (1.4 | ) | $ | (3.1 | ) | |||
| Cat loss and ALAE ratio | 5.8 | % | N/M(1) | 5.9 | % | |||||||
| Non-cat loss and ALAE ratio | ||||||||||||
| Prior accident years non-cat loss and ALAE ratio | (7.4 | )% | N/M | (6.9 | )% | |||||||
| Current accident year non-cat loss and ALAE ratio | 58.6 | % | N/M | 59.0 | % | |||||||
| Total non-cat loss and ALAE ratio | 51.2 | % | N/M | 52.1 | % | |||||||
| Total Loss and ALAE ratio | 57.0 | % | N/M | 58.0 | % | |||||||
| ULAE ratio | 6.6 | % | N/M | 6.3 | % | |||||||
| Total Loss and LAE ratio | 63.6 | % | N/M | 64.3 | % | |||||||
| Expense ratio | 36.1 | % | N/M | 36.4 | % | |||||||
| Combined ratio | 99.7 | % | N/M | 100.7 | % | |||||||
(1) N/M = Not Meaningful | ||||||||||||
The following table provides a reconciliation of our statutory underwriting results to GAAP consolidated income before federal income taxes for the three months ended March 31, 2020 and 2019:
| ($ millions) | 1Q 2020 | 1Q 2019 | |||||
| Segment (loss) income before federal income taxes: | |||||||
| Insurance operations: | |||||||
| Personal insurance SAP underwriting gain | $ | 0.3 | $ | 4.2 | |||
| Commercial insurance SAP underwriting loss | (30.0 | ) | (5.9 | ) | |||
| Specialty run-off | (0.4 | ) | (1.4 | ) | |||
| Total insurance operations | (30.1 | ) | (3.1 | ) | |||
| Investment operations: | |||||||
| Net investment income | 18.9 | 19.4 | |||||
| Net investment (loss) gain | (135.2 | ) | 44.9 | ||||
| Total investment operations | (116.3 | ) | 64.3 | ||||
| All other segments income | 0.1 | 0.1 | |||||
| Reconciling items: | |||||||
| GAAP adjustments | 5.9 | 4.1 | |||||
| Interest expense on corporate debt | (1.2 | ) | (1.2 | ) | |||
| Corporate expenses | (2.4 | ) | (2.6 | ) | |||
| Total reconciling items | 2.3 | 0.3 | |||||
| Total consolidated (loss) income before federal income taxes | $ | (144.0 | ) | $ | 61.6 | ||
Page 16 of 16