Exhibit 10.03




                                 ADDENDUM NO. 1
                 PROPERTY CATASTROPHE OVERLYING EXCESS OF LOSS
                              REINSURANCE CONTRACT
                          EFFECTIVE NOVEMBER 16, 2001


                                 ADDENDUM NO. 1
                                 --------------

Attached to and made part of the Property Catastrophe Overlying Excess of Loss
Reinsurance Contract between State Auto Property and Casualty Insurance Company
and State Automobile Mutual Insurance Company, State Auto National Insurance
Company, Milbank Insurance Company, Midwest Security Insurance Company, Farmers
Casualty Insurance Company, Mid-Plains Insurance Company, State Auto Insurance
Company, Meridian Security Insurance Company, and Meridian Citizens Mutual
Insurance Company.

It is hereby understood and agreed that effective November 16, 2001, the
following change is made to the Contract:


                                    ARTICLE V
                                    ---------

AMOUNT OF LIMIT AND RETENTION
- -----------------------------
IS AMENDED TO READ AS FOLLOWS:
- ------------------------------

         No claim shall be made hereunder unless and until the Company and other
         members of the State Auto Insurance Companies Group, being State
         Automobile Mutual Insurance Company, State Auto Property and Casualty
         Insurance Company, Milbank Insurance Company, Midwest Security
         Insurance Company, State Auto National Insurance Company, Farmers
         Casualty Insurance Company, Mid-Plains Insurance Company, State Auto
         Insurance Company, Meridian Security Insurance Company, and Meridian
         Citizens Mutual Insurance Company, hereinafter referred to as the
         "Group", on a pooled basis where applicable, shall first have sustained
         an Ultimate Net Loss in excess of $120,000,000, regardless of the
         number of Policies under which such loss is payable or the number of
         interests insured. The Reinsurer shall then be liable for the amount of
         Ultimate Net Loss for the Company in excess of $120,000,000 Ultimate
         Net Loss each occurrence, but the sum recoverable from the Reinsurer in
         respect of each loss occurrence shall not exceed $100,000,000, nor more
         than $100,000,000 in respect of all loss occurrences during the term of
         this contract.

         The amount of coverage is subject to at least two risks being involved
         in the same loss occurrence.


Nothing herein contained shall alter, vary, or extend any provision or condition
of the Contract other than as above stated.




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IN WITNESS WHEREOF, this Addendum has been executed in Columbus, Ohio this 26th
day of December, 2001.


         STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY



         By: /s/ Robert H. Moone
             ----------------------------------------------------

         Title: President
                -------------------------------------------------


         STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
         MILBANK INSURANCE COMPANY
         STATE AUTO NATIONAL INSURANCE COMPANY
         FARMERS CASUALTY INSURANCE COMPANY
         MID-PLAINS INSURANCE COMPANY
         STATE AUTO INSURANCE COMPANY
         MIDWEST SECURITY INSURANCE COMPANY
         MERIDIAN SECURITY INSURANCE COMPANY
         MERIDIAN CITIZENS MUTUAL INSURANCE COMPANY

         By: /s/ Robert H. Moone
             ----------------------------------------------------

         Title: President
                -------------------------------------------------




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