Exhibit 99.1

Sept. 2, 2003
FOR IMMEDIATE RELEASE


STFC REJECTS SHEPARD'S
ANNOUNCED TENDER OFFER AS "ILLUSORY"


      COLUMBUS, Ohio -- Directors of State Auto Financial Corporation (STFC)
have advised its public shareholders to reject the offer for their shares by
investor Gregory M. Shepard on the basis that Shepard's offer is "illusory," and
that it is opposed by State Automobile Mutual Insurance Company (SAM), which
owns 66.9 percent of STFC shares.

      Robert H. Moone, chairman and CEO of both STFC and SAM, said, "Mr.
Shepard's tender offer is essentially a scheme by which he seeks to gain control
of both STFC and SAM using SAM's own money or credit. It makes no economic
sense."

      The STFC Board acted unanimously yesterday on the recommendation of its
Special Independent Committee of outside directors, which also was unanimous.

      After learning of action by the SAM Board earlier in the day, the STFC
Special Independent Committee made its recommendation based on the impossibility
of meeting key proposed tender offer conditions. The SAM Board, on the
recommendation of its own Special Independent Committee of outside directors,
had:

      -     Determined it would refuse to turn over control of SAM to Shepard as
            Shepard required

      -     Declined to provide the required financing

      -     Determined it would vote its majority of shares against the proposal
            if a vote were held.

      The SAM Board communicated to STFC that it had determined that Shepard's
proposal is "not in the best interests of State Auto Mutual, its policyholders
and its other constituencies," and that SAM opposes the offer.

      Independent committees of both boards sought advice from outside
independent legal counsel before making their recommendations.

      In connection with Shepard's unsolicited proposed tender offer, made
through his newly formed company State Auto Financial Acquisition Corp.

(STFAC), STFC has filed materials with the Securities and Exchange Commission,
including a Solicitation/Recommendation Statement on Schedule 14D-9.
SHAREHOLDERS ARE URGED TO READ THE SOLICITATION/RECOMMENDATION STATEMENT, AS IT
MAY BE AMENDED FROM TIME TO TIME, BECAUSE IT CONTAINS IMPORTANT INFORMATION.
Investors can obtain a free copy of the Solicitation/Recommendation Statement
and other materials filed by STFC with the Securities and Exchange Commission at
the SEC's web site at http://www.sec.gov.

      State Auto Financial Corporation is a regional property and casualty
insurance holding company engaged primarily in writing personal and commercial
automobile, homeowners, commercial multi-peril, general liability, workers'
compensation and fire insurance. The company currently markets its products
through more than 22,000 independent agents associated with approximately 3,500
agencies in 26 states and the District of Columbia. Products are marketed
primarily in the central and eastern United States, excluding New York, New
Jersey and the New England states.

      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.