STFC - Earnings call transcript Q1 2018 | State Auto Financial CORP

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Operator

Welcome and thank you for standing by. At this time, all parties are in listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Today's call is being recorded.

If you have any objections, please disconnect at this time. to Investor call Tara Relations like Auto to Shull. now Corporation Financial and would turn over the State I Financial Director,

Tara Shull

Conference Vice Mike LaRocco; Good Officer, Quarter Vice President by to welcome Steve Senior Personal Chairman, Call. English; Lines, CFO, Kim Mrozek; Vice Earnings Senior Managing our CEO, morning, prepared joined open of Director Auto Today, Investment Labs, and and and our our of Matt of Officer, President Lines and I'm Garland; President and Jones. Commercial President XXXX Actuarial remarks, First Berkey; Jason the Senior questions. Chief After lines Scott Chief State we'll for

which factors from those which results at comments their forward-looking the risk a materially nature may may may to types financial differ our involve discussed in uncertainties, statements. of factors affect Such performance. cause These our forward-looking Our as of future of today reconciliations actual risk of filings Commission. statements, with or containing the projections the by number contained and include factors our as packet press website, available annual and financial is release. non-GAAP to section A stateauto.com, our end measures, information, the well Securities supplemental Investors with along certain and an on Exchange quarterly attachment release as financial press under in are

LaRocco. Now I'll turn President Mike the STFC's CEO, to call over and Chairman,

Mike LaRocco

are ups process. company, but only trying unprecedented the most with and not downs the both is morning, turn and also change, working good execution, The Auto at When team, patience great and key and the everybody. The future the have last challenging partners. Tara, here focus, and with been for enjoyable Thanks, career. amazing around years in agent X you're most independent an throughout prepared I'm my for many our speed. State there me to

clearest on, be that aligned technology. leverage X first become data, led on our decision end this announces product and focus. indication to could to the company But product As management where of until lines XXXX more the I was we first the the to working. work Early profitable the to in we vision our is we our are Is phase that back. last not is to At knew analytics, quarter are that not work, indeed both efforts turnaround business I are did exit quarter, No, quarter all years that know focused all of we That with back align yet that past and and complete. look complete? and hard growing. of the our that a nearly that lines

products agreements of non-renewing finalized began all of not those our business, decisions last the view property, were which did strategic critical now on have as November. matters. with except align we future the E&S focused these Again, We lines

trends. are ratio aggressively to XX.X%. that only not continue on to than produced For take written growth. rate, that new good. ongoing which significant and we very workers' commercial compensation trends our year ratio and The focus premiums coverages driving farm grew X.X mid-market segments and are personal and lines profit loss of The We better combined made loss the ago, by of business, lines personal, is we a in commercial, ongoing both continue small progress segments a XXX.X, and most and our points but of our ranch, across rate statutory we cost and

and of We reduce of every In loss factor efforts claims reduce efficiency across profitable loss in care business. is believe handling. all in to our organization aspects increased become addition, leakage line has key their also ratios their to our a drive

we reserve. personal be cautious Our and for decision our reflects current ratio as auto accident year conservative to loss

We are in still seeing positive especially BI. severity trends

believe force, be lines. simply are and policies business in in prudent develops. new declining many has this After of business as personal of lot a we we Growth outstanding years writing again. should going are we been However,

Our digital platform has been accepted and our partners. embraced by

We and products positive, The is believe distribution. industry-leading writer but intermediated personal are more importantly, commercial the as uniqueness and only itself industry get of through platform a unique digital-only I will better. our is a in

a have yet the While to lines. we I and are what trajectory platform in are our on measure corner personal auto well focused as have growth of commercial, return this perform ranch with seeing is growth pricing our continued compensation a not commercial to work growth, handling. out and In growing appropriate Farm improving middle premium more policy quarter commercial market to rolling had we loss nice and in similar aggressive disciplined growth anticipate continues remain seen a and clearly we trends. in basis, we turned line. some claims still our Workers' in solid

expense this Finally, know critical and to competitive We continue we focus expenses. to ratios. we long-term plan is on reach to have a our success

long know to do win without continued in succeed. not simply The platforms the in will industry massive that However, invest go years few change not can cannot technology. companies term we and in we that who that over next will change also through investment the adapt

in are this that that investments we'll We make reflect the on long-term for decisions and term long tech view.

to while to we every expense it I'll digital to as platform. ratios, new efficiency spent. very with in due technology on over focus combined growth, am can improvements. achieve diligently the to still continue that, can grow from investing the With of We'll turn English. we continue ongoing profitable dollar Mr. benefit will now I additional limited We also confident

Steve English

Mike. morning, everyone. Thanks, Good

our to today commercial our corrections I press as overstated footnotes prior to applicable. first the after dating period DAC, has Form primarily been material have other factors. of and amounts adjusted amounts previously result filed of DAC quarter DAC for been cumulative revised of as of reconciliations in period to correction our XX-Q, December was development Accordingly, the and of packet to December adjustments, million will throughout million be $X.X will for and data file as amounts for prior prior is tomorrow. using is not XX, up of commenting restated with period XX, investor previously our issued as well Previously per release back share that uncorrected amounts incorporate a XXXX, which restated to XXXX. expect The stockholders' book XXXX, financial Although incorrect December equity lines, $XXX financial reported to where Restated our share quarter statements, on discovery this as previously open XX, $XX.XX. book value XXXX, These per included $XX.XX. we statement value tax,

accounting change and in a which XXXX-XX, reported other included net in equity losses ASU securities the unrealized which of Moving share to net income per on the requires on We this gains comprehensive to $X.XX, loss reported of quarter. in new income. impact be rather pronouncement

$XX.X losses investment caption, investment million in gains has been unrealized net quarter, included losses, on and the the Over statement. the of income

tax standard, impact stockholders' accurately have net per adoption $XX.X as operating of net income reclassified other the of total new had with book million Also share. and the in of our this For non-GAAP XXXX, impact more or we gains comprehensive operating accumulated investment from January on value we reflects to the no connection which of earnings, equity losses, as believe excluded performance we of this company. X, retained earnings

lines maturities, personal of less $XX.XX, finished improved combined other ratio quarter per the basis, combined valuations Homeowners basis, compared value XXX.X with while to XXX. quarter $XX.XX commercial per of to in to combined than fixed securities our of December GAAP quarter, commercial was workers' invested XXXX equity of from Also profitable lower of book restated ago. the as compensation the XXXX. statutory year ratio. had On compared and due farm XX, assets.The first combined and statutory at share a ratio all with segment auto on flat was the XX.X and book was share over For value ratio first XXX.X a ranch XXX.X, profitable improved statutory auto, the of

for combined non-GAAP to insurance, loss ratio to XXX.X. our ongoing or development commercial $X.X and points. development reserves over a million prior daily loss ratio loss of million personal first statutory points. the lines results or XXXX, business improved finishing year of at X.X year reported of compares $XX This prior year Our quarter favorable ago, amounted of which X.X Favorable and

homeowners and million in in year also Homeowners developed adverse year in quarter. at one fire compared lines X development an favorable, prior of million, million. million of occurring improved ago late overall consecutive slightly This and than a quarter, large reserve from totaling quarter the half to continues year reported on commercial develop $X.X due to by X an coming continued XXXX. overall unexpected XXXX A XXXX. prior a development Commercial $X.X quarter $X more lines auto year this Personal quarters lines.Specialty with favorable favorable reporting adverse of personal the stream development. primarily from losses ago, balance $X.X to developed from the developed

statutory in did accident cost personal for XX, lines line the first increasing the reflective our a liability and December fire XX.X new auto of of loss ratio ALAE compared bodily Property XXXX. loss and on from non-cat higher year on personal Commenting a business the year non-cat a improved Focusing basis, of and to to for growth XX and recognizes Commercial ago. commercial from the XXXX quarter commercial water ago, freezing as couple lines.As ratio full ago, as as the quarter from of ratio at first as higher year a workers' some personal, of year this compensation. This weather auto, slightly evaluated a than on well suffered loss is year injury and higher losses and of product auto claims loss mentioned, we Mike of years. levels selected past losses. personal than ratio and XXXX

an specialty. Finally, update exiting on

is the X we've within any runoff only E&S amount full both As meaningful business. There writing of now. casualty, in discussed, almost operation products, are specialty

our in which rights a on second those, cease transaction of the closed we One will renewal writing business, last umbrella quarter. week

with the volumes the home business ownership taking and remaining panel employees the the are March office. approach reinsurers X.X shrinking, X XXXX, XX.X%, The business the all State are XXX% the team remaining new from We've the for The same a points year For down on the a we're transitioned loss Because agreement of companies. paper. last share primary was accident year the most quota responsible quarter-to-date for other, year. Auto entered employees from conservative current specialty to effective closed a reinsurance we arranges of while the replacement transactions to period on oversight results. under into feeding X, ratio new the runoff

losses the years appropriately. that winds ensuring as Specialty Our down. accident operating and will become I $XXX,XXX Prior year reserved previously. ratios we this quickly focus business will are be the monitoring mentioned accident were as up just primary not meaningful quarter,

drop quarter, discussed written we followed off last premium. premium will earned quickly As by

premium of line. by earned expectations is update our product an Here

quarter to which by year, For $X we has E&S earned property, million. million, for beginning second followed be $X.X runoff last and late been the million expect premium $X in

E&S to are and $XX the million. quarterly $XX million premiums million, casualty, For earned expected be $XX

I'll million. For programs, $X that, over million million, $X.XX Jason. And $X call to turn the and with

Jason Berkey

good Steve, Thanks, morning, and everyone.

While personal work lines personal the has fully a XXX.X%, our of respectively, in XX.X% still below ratio to lines the a in to remains lines I'm with profitability, XXX%. combined LAE report loss that to pleased second of that ratio ratio XX.X% quarter first statutory quarter this row for was and is and achieved a combined personal 'XX. compared The restore quarter XX.X%

retention, fully for actions on Those which we've months. of take have path claims rate to our retention to lower actions put it recent continue in We our than target targeted ago, flattening our product. in combined was ratios some operational seen is each our press and year pressure although rate a improvement on achieving

quarter we PIF in improving the rollout on in While profitability for quarter the and growth lift in personal of in premium, signs digital priority, the policies lower the see from offset lines. force, to increase continue The written is new from each which which highest X.X% will to the retention. continue increased grew the and new XX.X% to continues help business month product pressure promising

and first quarter Turning ratio compared LAE quarter XXX.X%, was statutory the XX.X% respectively, The to now XXXX. ratio statutory combined to personal auto with specifically. auto XXX% in XX.X% and a for of loss results of a

discussed into take result auto personal quarter policy states press the rate in rate of our XXXX In In premium actions claims XX XX.X%. in of approval XXXX of changes operational XX average quarter continue states, pipeline the second in and written increase with average We the of XXXX, department in increase of is to XXXX. XX.X% changes we a organization. increase in changes quarter in aggressive we in saw various of XX% is quarter, first bodily higher cost X.X%. increase X.X% The improving Subject rates. have an for the with improvements. targeted recent In to to insurance this liability premium average of operational Included second XX per is changes injury than changes In with per XX.X% the average we we March is made this an exception the rate rate made trends the an average XX we've rate rate bodily rate personal with and earned higher. policy in March on auto rate XXXX, the quarters, that our loss generally care our front injury.

the the earned rolling versus we the loss first as In cost claims loss of in operational change premium personal as the less closely cost period was In the auto to the continued in costs. remain settlement quarter for changes loss as injury bodily vehicle quarter of injury our the improvements operational are actions of claims of claim 'XX, claims. per premium trend. aggressive in progress in trends As reasons, was rate XXXX, premium affect the XX-month anticipated. for cost The the roughly than change in first earned our bodily and in bodily the rate realized, profitability, profitability towards earn Therefore, cost, restoring in annual understand our organization in will same quarters, loss loss made our longer exceed change in accident coming change take increase our increase high. injury rate watch year To many trends including the longer improvement

However, PIF in PIF further quarter on first the are up a in months. policies and be for grown year-over-year personal time, force same increased being bodily in our is PIF business At personal basis, up quarter for in in through personal X% level the quarter was April is of quarter, over we of several 'XX, a PIF necessary quotes quarter 'XX; critical growth although the a X.X% 'XX. new auto PIF-positive In follows: as 'XX, loss continue address we see the auto. first time XX.X% auto high profitable over first prior. cost over rate observation quarter XXXX on written is first more first from quarter coverage. straight years, to terms, quarter of up quarter net below XXXX, April auto seen And April, net of expect financial performance X in first seventh 'XX; above XXXX, injury fourth premium end and increased will actions the personal to is path Starting XXXX first auto personal are recent written to trend have step significant that of continuing X.X% versus consecutive September PIF growth; in has This XX.X% became first the of the growth. at the premium accounts year we the XXX.X% our

March Our April our the Most point XX.X% are which the observed XXXX, my retention retention XXXX. is of was a retention. we recently versus lower see flattening to in demonstrates trend XXXX downward XX.X%, at in March retention starting XX.X% in that from

story homeowners, to onto where Moving be the continues positive.

launch is from of approximately XX% Homeowners homeowners at X.X% increased quarter Homeowners of over policies homeowners growth in product. first Looking quotes lift our 'XX. in new of the quarter, the are a quarter business PIF experiencing first 'XX. by increasing also up digital with force over the

cat the first March XXX% follows: of is and 'XX; are in was while down the XX.X% XX.X% business was homeowners fire year ratio of to Conversely, loss XXXX. non-cat the pipes increased observed first ratio loss March losses due points, first XXXX. XX% X.X the retention average first experienced our loss over quarter the ratio a temperatures last cat terms, New is is 'XX In versus first premium due written quarter accounts than up warmer colder-than-average quarter 'XX quarter XXXX 'XX, 'XX lower with quarter XX.X% LAE as first to first homeowners XX.X ALAE in performance quarter non-cat XXXX the 'XX quarter of and primarily financial points weather ALAE from homeowners approximately first first quarter of primarily related first with year the for points. XX.X%; severe ratio which temperatures. claims points combined is than homeowners in of This loss ALAE XX.X quarter and was than higher the net to freezing 'XX, ratio large X in and from and in

significant rate profitability to continue, to place especially next maintain our storyline pressure can We expect for to continue bodily restore homeowner summarized conclusion, into rate rate coverage. both quarter and continue auto personal In on X homeowners' to retention First, severity non-weather our on be XXXX and increase to the trends the actions continue themes: adequacy. see in These will rates increases to lines home quarters. our personal injury auto for several higher

Garland level experience XX% and the turn product. in combination resulted of continue we've lines And increasing the an in the in quarter. the more to has states I'll digital PIF basis. over first in than to higher we increase call personal business a third, lines our increase in written With where increase significant new our increasing in lines that, rate new results. of PIF in level premium year-over-year a on an new business Second, launched personal discuss to resulted commercial Kim The

Kim Garland

follows. The are commercial Jason. as Thanks, results business

XXX.X combined increase of For XQ 'XX versus X.X% in XQ of premium versus 'XX. written ratio XQ XXX.X and 'XX, XQ 'XX

and 'XX, to XQ higher points experienced in claims For as ALAE as fire the 'XX. higher losses we non-cat XQ was whole, large non-cat 'XX statutory when compared story business property-related losses by a is, the the weather-related XQ higher versus X.X driven weather ratio commercial and freeze loss

While we biggest of begins commercial to of expense of medium reducing generally growth than long commercial impact over the in and them not Connect. ratio loss XX.X% to be, are XQ the for as the term. the the ratios investment platform statutory Connect The of will expense expense 'XX, commercial inhibitor points ratios ratios to need commercial expense driver commercial the where profitability. higher X.X hit our in overall in advance lines XQ be are 'XX, of the to launch But was Connect

continue in BOP and the remainder our XX more We states of for the launch 'XX and XQ to auto states of commercial are the currently X in to track be states on XXXX. end and by

early Here are the of some Connect. results from

Our production From Straight implemented have per quotes is unit months down. good. new BOP business look BOP costs model extremely business changes make states. in in identified for is Through Processing few May to will ratios system our and auto to market, feedback positive. continue on Commercial we and these up, be the production is Agency the new pricing first the new release

X Our closely the line XX.X% as 'XX as auto, lines decreases on a of a Connect years up on results experience profitability commercial X.X% as XX.X increase XQ ratios significant. is was and ratio trajectory commercial experience every the the 'XX after Our line LAE follows: and in results. noted. future to auto loss the is up ratio us by which business XQ in our following are poor of XX.X%, continue with years versus lines. loss Commercial is in for product as XQ launch and each with Connect the are auto focus operating 'XX. these This is line written of results confidence the Commercial show commercial loss versus The improvement the expense of small couple the our point for previously personal launch, product product premium product XQ 'XX which last the acquisition LAE gives in actions

in of commercial loss The volumes starting deterioration point phase We profitability 'XX small growth LAE ratio XQ losses acceptable phase primarily weather-related package. X.X% the versus XQ auto. claims are higher package was the 'XX. was Connect XX.X% which large not exiting in statutory freeze in XX and compared is commercial and we 'XX commercial as launch of loss is XQ starting, a our in Early commercial 'XX. the in Small XQ premium written is at property-related the This versus shrinking BOP ratio restoration an to loss ratio XX.X%, have is of package XQ fire in Connect experienced increased. new 'XX. business down when state and increase Small

be. be have Updates We BOP identified segmentation And additional will we less pricing improvements we are pricing May new over with to states, loss XQ summer. Connect still with the competitive is lower The where in increase than pricing commercial. ratio BOP the expect with cells to some the implemented we and model along middle market business meaningfully these to XX.X but ratio target line. in XX.X% our XQ statutory LAE 'XX higher for which market LAE and points 'XX, Middle is than loss this than changes. XX.X%, the is wanted

compared As ratio than we fire Middle to when was property-related small up market target 'XX. and weather-related XQ 'XX. this in in primarily 'XX losses premium claims freeze XQ experienced loss written XQ versus was XX.X% as commercial, higher large higher

rolled to As small freeing commercial, for focus out it is underwriters market up time commercial. middle our Connect on commercial in

as roll focus CPP out our make for market. Connect be growth clear to small middle is more path on time will commercial And very states and team of available is even more Connect, Our on additional underwriters' exciting it productive. our middle launched commercial market when will even

in loss and XQ X.X XXXX. market last our is X XXXX as months. XQ 'XX premium about signs the XX% compensation which The ratio first is XX our was X% middle up in LAE 'XX Workers' in XX%, lower started headcount our show points We're over market. XQ FTEs to excited market than incredibly has in field statutory workers' potential compensation. XX.X% XQ or this middle business of declined over the up new while The middle

year auto cycle. was XX.X% XXXX. in XQ discipline entire driven premium of Workers' Our swing by up team XQ in XXXX to workers' for compensation in XXXX a was XQ in ranch compensation versus this the in XX.X% business, better level is a This although does loss continues 'XX. execution 'XX and The farm a and quarter XX.X is phase year high and start, XQ significant XXXX off ratio than which a market X written but farm and points disappointing during XX.X%, was not ranch ranch. to make. premium. the a LAE Farm our lower of has show gotten

the will With line around. of results product quarterly this size, jump

business for important In year been both launch the The successful the line of will item and ranch our XX.X% The are is and we'll Connect ranch products. reacted ranch significant expense versus they the in last auto generally growth and and reducing ratio next ratios of taking team to LAE loss the With farm up Farm need our written the our be quickly years. note farm to rate that in poor questions 'XX. has the XQ our commercial to results summary, state was and several both and where XQ open farm that, actions for 'XX is catalyst and be. over premium

Operator

[Operator Instructions] KBW. Christopher line is the with of first Your Campbell from question

Christopher Campbell

increase And mean, hi, personal personal lines good morning. of lines? would and rights commercial then that specialty expenses? growth, kind renewal you traction your you improving in consider lot inorganic I commercial. And viewing like lower scale made maybe with your you scale exit, and Yes, a sounds of and how are the it kind something like to or the of

Mike LaRocco

it scale been us scale, love Chris, organic us very platform and efficiently onto in the the the maybe opportunity very than certainly the have business. past, different would become. we our would the we I for do add more way But we this to and has really the different even The is it, more today given more We the business. think, platform question to growth. the quality of efficient digital grow gives because of I certainly prefer uniqueness of

but of in-force rights you think not at fact new company, only elephant's as deals. for grow. potential never the our in an years, be if digital now for that backside kind that, right opportunity in customers. few of we're states a We're We -- other we I on customers, so looking renewal to never organically we far a the of have or penetration completely that much today. terms But will is as other temple reality look a the at opportunities say in

a in a We our states would do never, then we're sure uniqueness create We in the of the in. us that that potentially states I gives number a there again, we're think the So out and converting like in I business. challenges terms is us grow fact way think, not lot not significant never there advantage. more but I'm the say we to but upside that And for its business. in opportunity of do anything,

prospects we growth. really So like our of pretty organic significant

Christopher Campbell

is you're it on And Like is side? geography, focused? line? Where then kind in where do opportunity the you product most see those biggest -- it the where do organic of see

Mike LaRocco

Yes.

levers geography in I very we've product, all think X, quickly. growth. and and of There's opportunities distribution, there's X got

opportunity legacy of were guidelines we were pretty -- digital -- technology to opportunity being by you that our prior the opportunity, create limit platforms play, not old as legacy the because we meaning want underwriting digital our products, models, product If volume we effect, gave to -- our not in to models when everybody more by the what to on would were think really control about old tried across thinks better, very us just about it write. pricing the our good, sophisticated saying

introduce auto the models of other telematics, of it we digital scope of us close commercial platform, like that which see to are sophisticated on that and pricing team is products Kim XX% top telematics. commercial sensor-based to is business. these Now customers.The product wider a growth gives starting our in got course, we've getting now can benefit, our of new

upside now our of itself, quality also plays us." so tried distribution and to intermediated wanted umbrella-type stayed from networked in if past potential product in much distribution the opportunities platform, limit again, they the for had potential efficient aggregated getting the the dramatically. is the them away into stuff intermediated discounts. Agents many and Ohio I've Because state, built "protect sell distribution to folks distribution are on successfully have very in is product. even expansion? really and our can agencies, had help geography. of we sensor-based the others. interesting states We We've we're and Texas that within our partners. distribution, or penetration organizations just growing there's down distributors Smart where doing are our intermediated We on like changing were more our And mentioned been that pretty we we're then try had Absolutely. because, the to platform which is of others, have these where -- already of there our the road we those secondly one to able terms a old and in who would've and we the part agencies. knock states play. old states We geographic Choice Then there. the distribution. well.So compare.com, on the We're -- these many because in can days We have kind with than small never -- the Keystone, market look And Answer sync platforms. then bad way models thought because and third those smartphone of to commercial your Goji, things we're there's doing the at side. extend become fastest-growing you Financial way you like SIAA, part by some really Again the like of many, really limitations in find are to Is doors control effective organizations,

we've fully. embraced them Now

X of of levers of each levers. every upside growth, about think to we've those pull you those if single got one So

issue significant. side. and I the is the as first grow on expense our To opportunity So think efficient growth that to me, making we're sure very I'm can be the we're on is side. profitable optimistic as we that

Christopher Campbell

Okay. thanks the for all Well, color.

Mike LaRocco

Chris. Thanks,

Operator

with Larry your question from Janney. And next is Greenberg

Larry Greenberg

morning. Good

that that whole a loss have bit be on bit, some impact? the you new good penalty? on Or haven't you could of guys really the just of just loss But commercial to favorable thing. you is just is appear little applies a a development better And stuff and more on believing focus is wondering, standpoint, what that the and from So timing a be results? underlying that? want to us of need to rate just little losing I'm lot. a is reflective personal to too, to clearly picks auto the probably you to start And you that you're underlying color mentioned conservative do business a if auto prudent taken would having business then lot moved an really it see picks of give although this part And

Mike LaRocco

me begin Kim Jason Let can and and weigh then in.

a take believe there that of prudent to view. we it's decision more is no First all, question a conservative

of some new we business. telematics, is of models there Do in writing penalty of We is Yes, we're the Is and that feel we the lot a that that one, have believe business new and our a new are, moderated? well. Yes. business that the we typically as that penalty? XX% business changing with fact

new you we be, as the suggest, cause as be, as though to can want prudent important. does So us to that's business really

than believe that Second are still that but severities. thing about to BI moderated, have obviously very we bodily continue and be we're severities careful the being is they higher injury should we see

you other on at carefully that were concern comfortable or very not, of lost. not business the about very, producing legacy a any that the it's form. ours said customers we've side customers or we're way, not we've the On the We feel that shape really very better that in of That's ratios. loss looked platform that, business losing better what

a everything the here. In the need go loss from have the to going good happening scenes but we claims organization. leakage Obviously, of I'm organization, things what We've terms behind that not our lot we timing into we known care in about of beginning of see, had we've across ton to that. and a talked detail,

claims the provided. quickly. the organization to back On you Those come return physical has much the improved of damage our efforts you very side, see that

You it our see in rental can days.

like-kind cetera. cetera, quality et parts see parts, in OEM can You it versus et

injury see On takes side, a that. longer bodily just the little it to

quite making in cycle bit reduced, are your process. a you're You're the sure involved earlier getting times

deal that firms law you with. limiting You're

that quality do. you the improving of You're negotiation

believe will through. feed those changes, All of we

just before more would what, we So this our I lower and a I the you. to it. picks pick that quarters Jason, early earn with of is don't way want add but it's thing still specific right and matters, rather to that going I say really very want what Larry, just if reflect about of it, to thoughtful kind would and be this be tell that. feel than to put is thoughtful process one, But this? it, candid is about good do you are on the to number our we I which to reflects in you be

Jason Berkey

legacy dominated just in years would reiterate is of premium largely that current our earned Yes, accident ratio driver. book I the loss and by terms still

taken has most feel that of looked nothing need frequency in So the trend. of profitability the due BI closely we're that's forward, watch at to organization industry trends industry. where -- we're and are the others and lost closely Mike our there. everybody We kind to else to we've comfortable, the suggested, Severity actions as hearing And And closer this see need the business where improved trend, is. in of BI of stage. really kind we where frequency in it's we've care that we the actions trend think land there's out the at really we we terms that to our ordinary going that

Mike LaRocco

Kim, anything commercial otherwise? or on

Kim Garland

on lines probably just No, for piling also would I little personal guess, chime a in I on. bit

of injury I important right -- think on so of doing care can, bodily organization thing to where right? is especially time we our as you I organization, get try our and think soon And as one believe the has eyes things are spent at your more we stuff, in changes a patterns. your to of make sort make make of have on you it look some earlier historical we sure trying sure organization, handle When it. sort look changes it we those that so at claims type claims we the we of

believe our And tends of you of And one business, when skew a so write conservative, to be it philosophies of you conservative. is to right? lot new sort I so

change historical and reality stuff to that tends you -- earns just it a quarter is. you conservative. patterns the to every it in all in see see skew more what you And If that

if think for has gotten and little I I better but personal think, me I bit will auto get last this combined correct -- quarter. Tara wrong, X the each ratio quarters,

all probably gradual take. my think jump a more I being you'll be sudden of sort not improvement see than would of continuous

Lawrence Greenberg

all-in you non-cat was And just what an number Thank for the for quarter? then do you. weather have

Michael LaRocco

one. can think, I the Tara Larry no. will that answer is we you, get follow with -- Tara, can on on you up that together. Larry,

Lawrence Greenberg

Okay, thanks.

Mike LaRocco

You bet.

Operator

is Instructions] from Your O'Neill. Sandler with next question Newson [Operator Paul

Paul Newsome

Good morning, guys.

is you've running platform not at Larry, here, that is of, to think, I think, a effect, old? reducing targeted sort to has I'm the way all what trying there again versus new about running question be of got. -- the which rates, tenure that as kind which asked for platform after kind see new is, could I to is at, profitability And go obviously of we're same outsiders profitability that trying you the us

platform the kind, other that really helpful. running of be, you think, anything than improvement? What I would business us can mean, give us directionally that is, at new I So incremental of kind tells

Mike LaRocco

look excuse that still speaking of it really performing. at that how Paul, our have early too of types forth. And or so single me, you the feel from multi-policy and credit that so gender, that just characteristics of on all you on the tell business telematics. if in deserve a score, where and that we age, generally we on qualitative that that feels the tell we're of traditionally standpoint premiums value. on in nearly more. vast generally coming so everything multicar that years so sharing the speaking, basis again a -- we the number look can writing XX% that would because telematics. looks It's terms think on more that any at you is kind I can business give little a of at real majority the good fact road, earned the -- car, discount customers we is new I look too you make -- XX% develops Yes, And a forth, we'll can tell bit -- the as our a look you little telematics, at that do are those further, good, I low to vehicles, versus to about on give the early

little look But And as it's terms too another things. at soon. loss transparent you just company. develops, So that would in very of we're ratios, that insight give

But credibility, doing of to doesn't a again, side have it that So look to the it we're we how share have space. if that other want sense at with make that you. just you doesn't that in is

we're So to one last better. I'd really it's too but digital soon, the of the thing, also say the We're opportunity us company. thing -- it, about -- we'll a tweak And it get see. the gives we platform, technology the kind other new as is, thing business about

we're we're and now but need. make have that the models, We our new we platform phone wouldn't of updating when really adjustments our as pricing the company You dropped, known insurance kind sells a including regularly that technology to ones.

better very So today early much we a very react a we're want at the move way segment how on even suited and performing look quickly. we not to things that's performing have are to

from look to would So very Anybody the Kim? adjust high that. want level you kind it of what we're one carefully to last to model time, piece adjusting add very, a is The We're characteristic at watching standpoint, expected. traditional anything, us. telematics we have rates to and encouraging getting if it and quickly very is both

Kim Garland

like insight on days, speaks high, make product is, available sort your the about, get I ballpark. a So we is competitiveness data market platform lot too I that as so anything Mike these so the into in the guess, we much and at other the the get that in new we of agencies only is information we add thing would when early credible, as are that low. And sure loss right and too we're try not to generally in look of

Paul Newson

very much. Okay. Thank you

Mike LaRocco

Paul. Thanks,

Operator

at this We have questions no time. further

Tara Shull

conference our XXXX. interest participating August of in currently our to X, call, you We with everyone, call for forward the all quarter Financial you, want of your speaking and for you, is second State a thank and your We for on support and for Thursday, look you Auto Corporation. Thank day. Thank scheduled again which continued have to good questions. earnings

Mike LaRocco

Thanks, everybody.

Operator

call. first earnings concludes Thank Thank for you conference today's quarter you. participating. XXXX That

You now may disconnect.

State Auto Financial (STFC) 11 May 182018 Q1 Earnings call transcript