STFC - Earnings call transcript Q4 2019 | State Auto Financial CORP

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Operator

Welcome, and thank you for standing by. [Operator Instructions]. Today's call is being recorded.

If you have any objections, please disconnect at this time. I would now like to turn the call over to State Auto Financial Corporation's Director of Investor Relations, Natalie Schoolcraft.

Natalie Schoolcraft

Carol. you, Thank everyone. Good morning, our fourth conference to XXXX quarter call. Welcome earnings President by Today, Matt CFO, Investment and Vice Labs, Commercial Kim our of State CEO, Officer, Vice and Director joined and Steve Personal Scott Managing Lines Officer, Mike Senior Garland; and President Actuarial Auto President Analytics, Chief Chairman, I'm Jason Mrozek; of Chief and and Vice LaRocco; English; Jones. President Senior of Data Senior Berkey; open we'll the remarks, prepared questions. for our After lines

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

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

Michael LaRocco

and Nat, everyone. good Thanks, morning,

innovative to exciting company and I'd the P&C congratulate most Welcome, Mayor file welcome Mayor. the and First, opportunity in like him on to getting space. the

under combination data, We Officer internal on area will me. key innovative our update Analytics year. me be let Data and made believe to lead Data that technology, some asked reporting our you we to analytics I beginning Chief as at factor culture felt Berkey Next, so commercial the changes of a the Jason a who of change, commercial, and With in focused his both going Garland's knowledge will centralized ensure led personal moving consolidated and forward. creating to leadership. lines, group. a before seamless this lines personal previously I our this and we Kim lines, Kim transition. it was business to Therefore, critical institutional wins

end the and turns, ups started a just year. results. significant that to a product year, Now ultimately, of the we had ago, successful auto mostly XXXX said was last year turnaround There We platform. few were and for in a was step correct. was X that personal I Auto At State intention. additional years the flaws last areas XXXX and Unfortunately, and modernize there but was year, it had our we State of were I that early this the took downs, many some personal auto complete. forward. in another needed our journey twists covered Auto

across that disappointed I'm place us While what will our business. compete have year. coming these put XXXX Kim I'm XXXX this in all schedule, prepared we entered to we put behind challenges of fixed our changes lines are the that early address that and product challenges auto pleased and the and fixes in in

auto to needed platform a resolved of anticipated and well will that the having fourth endorsements. by enhancements were was our updates in digital completed last first Again, The adjustments. both as fixes improve able speed auto handful additional modern pleased the not of is be as we majority a just stability year, these while to benefit that This platform. the some of we with work quarter. were I'm as the entered to work make processing of needed The year, that vast of improve quarter the the

results. profit, a Unfortunately, make our misses the result of to where did underwriting both and not we year grow auto failed was across unacceptable an

platform have auto, we can understand the now innovative an this a year. appropriately poor specifically will upon this back veteran I'm digital and of business from industry will a competitive and product. confident we As stable which place We bounce and and

write There for significant of auto Auto insurance. amount to a is State room

agents fair allow and Our will win to approach their product share of line. emerging digital our this competitive

While our news the auto better mixed we much homeowners. but failed hit expectations, in and was to bumps meet across

growth, to continue indicator clear the digital of achieve well-designed again, a We product. a and significant of our power, platform

our will back multi-policy and product becomes an As increase sales. auto as more comes anticipate we whole competitive, benefit in

a well, is the look results growth know home of at cat and both non-cat course, we the weather. significant so carefully a results without Of profit disappointment. that unacceptable consider overall We as had and level we

we above of in well a losses, fire in resulted expectations. quarter. combination had handful addition, a In our The ratio combined particularly the fourth

use own We to year. fires Now otherwise weather, not we or or the we results, expect and profitability this excuse. cats do return as an to

an had year. lines commercial Now outstanding

lead We commercial lines. a first distraction, we potential have knew in commercial the direction. these exited E&S, opportunity XXXX to Auto. that presented for we unique and small commercial belief and in are lines market a Once and realizing that that consistently expressed step State a focus was both would major lines large unprofitable our middle on our

by that Our been and as small better commercial our provide digital embraced commercial and well segmentation partners matching rate of as platform risk. auto newly agent has to for designed products

is of effectiveness. in Our middle will more components the us combined X new and State our quarter both success empowered second gains culture, the we and -- we allow will middle platform. all of year, anticipate digital the efficient, ratio start be to growth, control properly This come of of this our market of In helping resulting has in even the team, loss efficiency the expenses. benefit new rollout foundation our of platform. the Instead, Auto, market without which our the

comp. that believe trends at we workers' market file be than but We commercialized can continue products grow rates comp, the unprofitable workers' all to refuse we other to across grew we where levels. pleased especially set I'm

final claims write growth pricing the the be package line discipline commercial be platform. new Our That with XXXX, some Workers' appropriate offer able and small our market. Once comp handling agents for to on the midsized the in our getting complete even both on the focus will underwriting, and will platform. on remains will same in rate. undisciplined digital the complete,

ranch digital farm significant product unique Connect, a on because is platform. industry. and our just We product of in the is has that our the again, sophistication level This so and innovation launched

Our this X boosted as states, we states commercial line be in also lines rapid will we add growth in rest currently new our of the business. with are

in we only end As I quarter, by leaving second noted of market should in market the the the the commercial, year. out a comp, roll start middle will be workers' which to

performing our We have believe The profitability still but expense are ongoing be attention, commercial our growth. and profitable been As happy are our our about We commercial as built growth, consistent across lines I the to that well-designed expectation. ecstatic as products ratio. always, have for need loss the ratios will generally profitability. am about key, I'm for underlying

a our an have We just In not industry at for to technology XX-year-old set time, startup. years pride a the were, modernize known out XX-year-old in the team's words we company. this I achievement. ago innovation, can't few capture Indeed,

scale we we cost of with lead X we to of the will the State have of investment behind journey, The us, this can technology insignificant, the to our not new year enter brought products. the but largest that industry and efficient digital was part As to Auto with build now growth. continue the front

Achieving ratio. platform a our key scale expense on is getting competitive to

the with been prove journey been in the for disciplined profitable expense large to continue technology, where last our we be now our are Even investment investment our have as we but to at get must ratio expenses we will the the years. some value about improvement, able few with We in have we point growth. of

our and expectation. results our incredibly We for XXXX those did year, was results. not full an responsibility take challenging meet

in majority products, products with full of numbers that sophisticated not now We and have place the However, for have do been our tell story. modeling pricing. digital our the platform rebuilt

rebuild year, have and complete to our product. We to key last of in largest profitable will our This began us line. that platform our year, that product growth allowing across stabilized we journey this continue auto the improved

continues success. culture the driving to our unique in be our factor Finally,

XXXX and is insurance. an lead and to winning. professionals personal are are as building a that empowered organization We on win innovative, about of ready lines commercial of We team passionate and entered who across compete

And turn with to that, over I'll the Steve. call

Steven English

good and everyone. Mike, morning, Thanks,

year. reason release, create. in new corresponding the fourth greater This other created or was as and from with reported XXXX last change loss and the quarter guidance primary new full that unrealized is went see predicted it equity can morning's the it periods reflects the gains losses was significantly securities has in accordance for volatility investment STFC same and gain The in to XXXX. you As the net invested effect rules into than that income in on year net this the assets swing

per to diluted STFC 'XX. insurance by XXXX compared business. $X.XX diluted $X.XX combined runoff primarily all the lower $X.XX for as fourth XXXX. of and excludes these underwriting investment as XXXX quarter results results which On with operating earnings for commercial are quarter the gain operations loss, net fourth or specialty a in STFC personal the reported $X.XX impact the impact Included in compared is an of the reported The ongoing of ratios. basis, of well higher share level year-to-date driven basis, On of the to in of per operating share

but year higher our basis, Looking quarter GAAP in ratio combined than the X.X ago. combined quarter is ALAE ratio GAAP than points of cat quarter comparing reported ratio XXXX XXXX. XXX.X of X.X a fourth quarter results the fourth cat at can and of higher XXXX, Quarterly points ratios X.X fourth fourth a fluctuate, the X.X to on is of loss the

Two significant cats. higher level items of drove the

quarter reporting reported. late Irma impacted we seeing as development reserves response we we specialty in additional added was in seeking additional insureds be beyond claims insureds owe efforts by We by beyond by and adjusters and/or what what XXXX seems Harvey public losses development believe the expected. on of representing already to damages and recorded claims we First, second Loss seeking claim are to well. to of damages these

million these loss development of X.X litigated. X.X being the are runoff. and possibly points for year-to-date. drove will adverse in claims Some specialty This Specialty the end quarter to quarter X the cat or of added up

For these the are and year, story losses within most significant the cat quarter specialty.

of of this an the XXXX Worth area. $XX.X for we in the million quarter of storms quarter. late non-cat compared fourth million ratio Second, a estimate of quarters, loss non-cat the points, for cat and loss impact and combined specialty the for the On fourth the increase ALAE XXXX XXX.X $XX.X become same rose for less declined of X.X $XX.X the the 'XX, fourth X.X million of the Each the XXX.X runoff of points continues when and XXXX X.X X GAAP the is be and ratio GAAP the the X.X impacting expense Comparing for recorded to X ALAE ALAE while 'XX, an and ratio loss focus points. Collectively, reserve the ratio X.X expense of October quarter, estimates. up year-to-date impactful, points, Dallas-Fort up The to basis, ratio quarter our compares of declined ratios point. GAAP to periods. points successive was comparing the and less has on was adequacy

I into segments. and personal will our the commercial turn attention

As were 'XX. a ratios periods combined can XXX.X and our statutory disclosures be XXXX of segments' the basis, on release personal same seen XX.X our for respectively, quarter compared for from XX.X and press to year-to-date, and fourth and XX.X commercial

periods somewhat XXX segment year cat with drove commercial loss below year and slightly in non-cat ALAE improving grew results in year-to-date results improved above by higher XXXX the lines expense offset ratios The for periods segment ratios. the and time. were XXXX, reported ALAE losses, the when for by combined higher combined when and for compared ratios 'XX. quarter lines ratios personal the combined our XXX, and personal to the and were while compared in same overall XXXX same ratios personal underwriting book Our higher in X.X% to of the XXXX These ratios. quarterly impacted

a 'XX, year with 'XX and commercial were the to underwriting results for from respectively, the of XX.X full and improved, XXXX ago. quarter year same ratios of XX.X combined XXX.X compared much fourth periods XX.X and

loss compared Garland the remarks. improved detail compared quarter to provide ratio same and XXXX, and basis. For both the Kim XX% points for lines product X.X when greater commercial the LAE XXXX Commercial the the prepared to year, year. the when grew declined and will in his on X.X expense points lines over results

expenses. my up results, spend year let's on wrap and loss prior a few on moments To development comments underwriting

year not points point personal 'XX. points a expect compared year, favorable aligned Homeowners of of significant as of the favorable net loss development prior it For compared has lines points included short-tail of X.X adverse X.X is to to development homeowners non-cat property. X.X amounts for and business a of for where we development ago. reported XXXX ALAE reserves year development X.X development

the points of and XX development ago. reported compared loss For reserves net a year favorable year, points ALAE year non-cat lines commercial prior of to XX.X

on We mind, of experience the favorable see in than year dollar so XXXX ratio to and premium been higher in amount market well. But workers' the continue it to compensation. impact commercial absolute reflected half in is was XXXX. roughly emerge less development keep has greater higher book Small favorable The what contributing earned shrinking, middle in was commercial of XXXX in amounts was development, while auto of XXXX. as current

net offsetting Base points. XX.X% growth, though, and as business overall platform. as percentage for more premium, book With associates. middle to as we farm items in the commercial ended for and ratio rollouts to is no profitability, focused costs compared Connect personal lines as XX.X% to project-related 'XX, these expense On is scale. and a adjustments a overall written With forward. on compared a XX, our is in increased 'XX net of our see ratio improve our of compared lower such was trending With from to and Connect on the expense compensation as move ago, continue our costs change those business variable benefit comprised X.X of commercial in total statutory more ratio salary compensation basis, of was lines expect as of system less commissions, year we from down ranch underwriting dollar expense and growth material XXXX. premiums of did digital pressure and overall XXXX, written auto the a would commercial and of workers' normal XX.X% and to although written associated the costs, year small There fixed continued at market, the December wage reduction

fixed income was income to million million the fixed XXXX. $X.X investments. quarter quarter. on investment third year's Net in last $XX.X compared Moving million was evenly of fourth down and XXXX, traditional lower $XXX.X million $XX.X Overall, between December maturities XXXX. maturity for from fixed factor amortized securities income, and overall of million contributing of declined from and runoff. the specialty the XXXX but as tips. decrease investment was of portfolio is XX, reserves claims and A up XXXX. to The settlement split million are net sequentially $XX.X during $X at cost XX, than Year-to-date, December specialty stand

over And to call with turn I'll that, Kim. the

Kim Garland

I'll commercial morning. covering Thanks, Steve, and morning, good everyone. both personal be and lines this

combined versus versus our produced produced a with For written XQ of lines. entire a fourth I'll ratio a versus of increase of XXXX, a XX% tale 'XX of XX.X lines of in of XX.X% year for XXXX. stories. year was for Auto, and combined the year entire historically of and XXXX, different and premium 'XX both written good quarter is it XQ X the increase 'XX. XQ State start commercial XQ commercial premium the which 'XX a And the XX.X XXXX ratio XX

premiums The increased The XXXX. commercial lines, year points dropped highlights XX% compensation in of XX.X. the X.X XXXX. with of XXXX Commercial business Growth the the for from continues commercial XX workers' new to in product expense commercial lines quarter all strengthen growing to except and in lines. ratio

these is new currently commercial in in and premium is it XXXX. business XXXX, an commercial the while amount for written million month product Connect in January umbrella XXXX new on auto lines of the business we platform. wrote continued Our and of of almost average we $X that Connect, wrote traction products commercial in all as on This commercial in gained

we the solve in in of The 'XX grow. have for following: expense discipline year the more challenges were both discipline to XQ We need is are And shrinking above XXX, lines pricing maintain We continue both for workers' commercial ratio. quarter how line. pricing the still the to still still this compensation, commercial combined product commercial and improve ratio and and in to auto while the of we XXXX. get and maintained auto all for to rate need XXX.X XXX.X

farm XXXX, which opportunities farm this Connect, Connect many will With front in be entering ranch ranch month. X including launched are rollout and we states its new states. There earlier our of and first us, in X

currently started potential commercial upside is middle or of CPP its products first product with these a to the the to Connect, on Indiana, market and Connect lines launch commercial tremendous is commercial umbrella, we while scheduled on there traction amount in have BOP, of couple state, untapped for Connect. commercial still auto And months. next get

have of commercial expense the from Connect. ratio surface only the benefit we scratched lines Also, for

For of X%; 'XX, XQ 'XX, is it on XQ it premium 'XX, X.X%; all XQ of of as it 'XX, was as the was as commercial lines, was X.X%; following: a X.X%; X.X%. In it as of Connect was of percentage XQ and was XXXX, of it

lines XXXX advanced. work commercial be While year that associates, us, our was significantly started. we still could business believe of our the much a and has business all lines ahead we not getting just are prouder of commercial where I

Auto. lines, was personal XXXX challenges of for year State For a

for 'XX combined versus 'XX the Our and XX.X increase personal written of in of a entire year premium lines XXX.X produced XQ XQ ratio a versus 'XX of XQ business XQ 'XX. X.X% premium product challenged XXXX. ratio versus XXXX, line our X.X% produced personal XXXX. the in and most State auto of the where a of Auto business Personal written was lines XXX.X a increase is And combined

reflect those Our results challenges.

X.X%, minus retention growth Georgia legacy; level which if minus auto XXX; a of policies minus X.X%; ratio of premium rate force decline business of new minus force XX.X. you count rate a and of rate combined XX.X%; a are personal is policies our in a results a of X.X% growth exclude XXXX, written growth For in a

alone, are rate results personal of X.X, 'XX exclude results. XQ ratio combined are And do history business retention minus through again, growth XXX.X; of For XX.X%; Georgia these Questions these growth and of in explain policies results. to some growth These and unacceptable minus force a written of are premium them? when minus about of help our new Walking rate a why planning rate auto XX.X%. occur? a you count we what X.X a X.X; legacy level a will business; are, minus did results

XXXX in personal wrote was insurer back historical First, auto auto preferred our State of entire of writing spectrum on the that auto Auto's personal personal predominantly auto personal This XXXX for become auto different objective risks. and a focusing "prime also to strategy was of risks. than life"

better When risks about the risk lower risk standard with industry prior The score mean talk risks, these auto minimum credit limits of and the talking spectrum, risks. personal but higher and nonstandard not end risks the are we about we might end risks no of we risks. insurance risks as describe activity,

From entire business manage approaches these nonstandard business, day different two operational pricing one, and manage this a standard required books and managing book risks, of doing different business, spectrum that preferred successfully requirements. of two understood differently and better we these we both of business had of of that successfully for to effectively the books to book things to

standard come managing business. personal better from in struggles not auto of personal our end nonstandard auto Our predominantly effectively

risks the we evolving rates couple operations. and pricing, our standard Over been on better of nonstandard the last our have years, evolving raising

accepted the of we number significantly down reducing where month example, risks X For payment.

to changes for they or enough not our XXXX aggressively in rates. were nonstandard rates the making than lower Generally, highlighted still operations. our our enough better business needed mistake And was be. that urgently area standard poor of Our

rates resulted higher rates percentage and and standard of of execution nonstandard us These was business. it better in risks a operations than that preferred standard we was in better in leakage were our book for not operational a for resulted business mistakes and than approach at underwriting Our expected still adequate. these attracting nonstandard premium higher that

spectrum; personal at following we be for ultra in the personal for higher the updated implementing actions: and One, rates preferred To risks risks will we risk the address that be lowers an rates and two, sales of these we managing end managing business, preferred able taking the preferred will making these be the auto need book issues, a book do to different and personal that changes than model pricing and to team of operational know what underwriting the business. will that is increases is reflect results better auto and reality and to a of we improve business personal standard changes. the execute We ready of auto nonstandard auto our

our personal story in struggled also Homeowners XXXX, homeowners different is auto our than story. much but

written XX% count a homeowners growth a results policies of XXXX, rate of of in plus of growth new are combined For XX.X%, a XXX.X%, ratio a growth retention of premium plus rate a rate business XX.X%, our plus force level XX. and

results combined are rate a of business force XQ new growth premium For count policies a written of in of of 'XX, homeowners XX%. rate and rate XX.X%, growth XX.X%, ratio XX.X%, our growth level a XX.X% plus a retention a of

our Auto's with Texas are increase appropriate; growth of business. rates a Texas. Texas states will our any XXXX, our given of so loads XX% consider: business, other dependent the homeowners homeowners book two, Texas loads up percentage was represented rates weather catastrophe year. of in homeowners business believe smaller and XXXX. One, This year catastrophe total the of focus to XX% There in that our weather Texas the Texas, in our and homeowners on are very a homeowners here a We to in be we Texas our homeowners that are in weather bad homeowners issues adequate? In weather results State are need of total in representing in X Generally, business, the XXXX makes

to I'm personal said, with and associates. results thrilled to get business opportunity Again, unacceptable. our lines work our again That lines personal the in being are

improve has X business. been for lines back eager associates ready X and the weeks my crystal that thing them During personal is the to clear our of work in role, are the personal this lines that ahead

and to small personal has of workers' product major X to commercial commercial, When meaningful and rance, them commercial, and required one, get auto, across market it positioned immediate farm personal in good compensation desired work auto, state. homeowners, our a middle are lines, condition I of and for auto, well our look success, X amount

And we open for will with questions. that, line the

Operator

Instructions]. [Operator

Paul Piper Our from first from Newsome question Sandler. today comes

Paul Newsome

related of couple A questions.

the you First, retention I could of you some how could hoping then change hope you give situation future. was auto on or that think hoping about kind well, and Lots was us become concerns detail the in more relatedly, talk trying difficult? as environment. auto I to the the insurance's will And very -- that it profitability, improve it has very, make book Or... market. competitive of of a has if market the And how challenge that does made more the that

Michael LaRocco

got I'll let I've Kim retention I the on can think market Kim as I But environment share quite view Thanks, both. certainly the about in want weigh on talk well. and a that some Paul. thoughts to on market.

Kim Garland

So going I of think combination retention to couple of things. is a a be

it's sort on think ourselves. things that of retention, do we I first of side the So

both the end spectrum. I spectrum, when ends spectrum end risk priced a preferred at So little high the I the a bit of of bit mentioned, I think, on and the sort probably of at higher little on of the look inadequate we rates are we think

our have mentioned have less And should Also, agents think I help or so versus greater sort stable to the help issues. Mike -- down renewals brought preferred, and of their -- be are systems-related as rates retention. that to stability less that we auto greater platform, stability is in the going preferred

retention should help our that also. so And

year, think aspect had and I business a a it X-month bunch very of retentions. last third stopped we mentioned that writing payment, of had down we is, low

a business fact retention writing help is to that that a the And book of as aren't we so going the anymore whole.

are If things markets we I'll things. individually. them about markets, retention call in nonstandard lot each think so And those of individually, these a should of help levels there standard, preferred those

of sort attracted I just of to of higher they that a that of we the things general was being bit type probably lower be the expecting, because mentioned spectrum, end levels. than of risk issues some prices of one But needed and business the retention business lower at we were more and than has operational

the more preferred what writing And retention will and you is which shift see so brings a just I a level. over think more higher coming year business,

as as the mix so as changes, we working are important on. driver that that that will sort a be individual of And things

when think rates, actuarial we at -- state set the I When market, we the it's And look of both of when indications I look our we competitive both at market. and the again, are position about think put rates what sort in -- the I have we can market, while and market, think market competitive. go that getting especially preferred, market seen we believe I more we the the competitive, adequate are the by think ultra that we end, both in in preferred

and And even continues personal competitive, auto there. though good position so more always to is we think we it get competitive, that will be in

will need we will rate higher of spectrum, we to take the end we the that the see what at think I is, take.

competitive standard may some on we nonstandard is part risks, not or fine so the And with us. better that of and be

Michael LaRocco

that of obviously, dollars, I of to Yes. marketplace. them, are their those are a some advertising mean, very billion their going they add companies win between And billion and handful $X to the share opportunities. those fair and $X it's to commentary. just are Paul, driving clear able there's that they're customers advertising, close to And site, spending and

be are that of the space. So market, to handful, that a into going pushing truly not foolish some consolidation to particularly top suggest there's continue the level mean I to that of a of it companies and handful, just with would be towards

rates of I'm they're not are you range the go those billion always X you've those that's X, X, out, interesting companies billion thing And spending the sure about drive quotes, to to would done $X come And be what that opportunities. that extraordinarily $X will that market the that this, The surprising. if inefficient. and is that it's back auto you I is get and mean by

So for more there opportunity a handful is than to just consolidate. of companies

Because Now you the not and walking some dead to regionals line men be believe able going the mutuals have successfully? core old line do and XXX%. are to I old are have things. to compete

have a least efficient in an can process the you've through have, competitive got make have selling a rate expense got that You've you're you agent. if there at reflects system that. independent to to enough efficiency And seamless very because your ratio to

like independent thing other are lot walking that by literally because mutuals the for creates underwriters it commercial misconception from a themselves. a about become is companies that's and opportunity this switch trying seeing adjusting auto, auto more agents in market not the is small not accepting a tweener away are State -- of those regionals about to future that of just kind they're are those Auto. either way, and The agents which the other to and change misunderstanding But

a call have significant customers driving search their like they have They up looking agents well business get would space. online are who State a are what they are their is go we We set And presence. website. are that kind for doing really in advantage Auto digital they're partners the agents or at they presence. to having And local of also that of quite that they of number -- what that least digital portion our engines, a of and

to companies team opportunities like and market, launching for the of a bottom the XXXX. start platform been exiting of things other our will some their And especially of innovation in that launch inefficiency level the of space that so products, dwellers into continue creates has have and changes the combination will around who and the with their telematics that

to our it. on that that. win actually market So we'll of who all I some at very the that look from share more strong outside you continue But don't and we're can than the feeling we with know agree pursue fair of we business, a have in auto.

Operator

Instructions]. [Operator

Our from Shields next question KBW. from comes Meyer

Meyer Shields

Great. differently, does second. you differently? about talk managing auto I capabilities encompass spectrum? When books the And push on to for the claims the you wanted a of can that about end handling talk either your

Michael LaRocco

other and we we Yes. very clear want want view the we core friendly is our we fast, question to no. to organization this good. to The process answer have your be want to make that In fair, in claims words, be be

be. Now, is There possibly a there could change?

call adjusters to the and it, about time your Kim a and by by or we're of the There there of day as not way, yet. X better see thinking you folks basis, your got they're happen the nonstandard example, standard. availability when claims differently more for So in, different you've a on things more be may spreading as be XX may

to have be understanding that change. of You

have those be more You to responsive issues. to types of

our I think So care claims-related is built handle issues. the organization to

when is handling bigger have The thinking you about to you're be billing. at the that better issue business,

service. You have be at better to handling

number happening. of You have different might that endorsements a are

you've in the a very be high got You pricing, as payment-related may on issues in could to that importantly, happening. be going preferred be different thoughtful of retention space, type because to space. business most But the that's is your as that about have your never

asked answer. appropriate So I gave Paul I Kim think about an and that, thought

the middle that that into you profitability When of price X. you year space, time. business, on can't penalty with type willing So be be for for get long sure could you period and you business anticipating be -- you for there from preferred the may to the space some be X day nonstandard and of business business to understand need it's new a to

in so getting Kim in those And right range to the is is that relating process of place getting that we've steps more taken. issue that and terms where of really

there, is our say shrunk know that launched not that I auto when a prior product really too had, lot I this we don't history the far more question, and apologize. just may a this was XXXX you answering of good your other this start-up mind, a is had But if in so to add auto I'll like business. -- be 'XX And X that thing in product, we The had ones I reason had we people going it. performance

just product, and these we But evolution and terms frankly, these another build -- this that. product, across of 'XX took a of evolutionary that And we the adjusting 'XX. So new in have we process, it's is bumps unfortunate is this that forward an performance. and step quite company

on I the the And to heart put like it's the side question we've steps how rate effectively. think to whether that. whether whether Whether business really of to approach claims do really I we it's matter. setting, it's got on understand So it issuance we on be in on goes or billing your sure because place that to or it's or the

for long a answer you. that So sorry if was

Meyer Shields

was that answer. No, a phenomenal

you losses, reinsurance given, say, how [indiscernible] weather are is question, let's XXXX? expectations, could Second the about above for fourth thinking non-cat purchases quarter

Michael LaRocco

let -- in issue private is of this. fair, Steve? kind biggest that Is We on I'll Yes. the Steve weigh think I Texas homeowners.

Steven English

cat impact a might Dallas-Fort that, like top. question all discussions Yes. always already that careful just so you're look But to marketplace $XX is, have But that cause the a long to through on have make That's we be years in marketing Worth, the properly weather with changes. to initial sorry, mean, treaty to -- look I on going fair, Mike. So not broker up We're think million. that clarify a put We're over as we real property Meyer, on presently on retention question analysis haul, and call load real have our is and priced entering potential risks? efforts is bit unpredictable. group because had a quite with going are results now some right maybe what to tail an have us down going the we cat is, we're it take so when into -- on business it we adding I'll is to going now, at what's and and some or, have I our to that at money? the just basis, where yet. that a

[indiscernible]. buying So or likely I but it structured, we'll add. reinsurance foresee And, guess, massive I our don't changes probably that's in is

Michael LaRocco

agree. Yes, I

Operator

in to else turn for closing this And no back queue time. call remarks. we Natalie some one I'll the at have Schoolcraft

Natalie Schoolcraft

our participating conference and earnings Thank currently in support which our for call, your Thanks, quarter Auto to in We you is everyone, Corporation. have your State forward a May call look day. continued on scheduled X, and Wednesday, of for wonderful interest Financial you, for XXXX. for again and questions, speaking with first

State Auto Financial (STFC) 20 Feb 202019 Q4 Earnings call transcript