EXHIBIT 99.1
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State Auto Financial reports fourth quarter and year end 2018 results
Quarterly net loss of $0.57 per diluted share including $1.25 per diluted share, or $54.1 million,
of after-tax net unrealized loss on investments
Quarterly net income from operations2 of $0.67 per diluted share
Quarterly GAAP combined ratio of 94.6%
Return on equity of 1.5%
Book value per share of $19.79

COLUMBUS, OHIO - February 14, 2019 - State Auto Financial Corporation (NASDAQ:STFC) today reported a fourth quarter 2018 net loss of $24.5 million, or $0.57 per diluted share, which included $54.1 million, or $1.25 per diluted share, of after-tax net unrealized loss on investments, versus a net loss of $6.7 million1, or $0.161 per diluted share, for the fourth quarter of 2017. Net income from operations2 per diluted share for the fourth quarter 2018 was $0.67 versus net loss from operations2 per diluted share of $0.491 for the same 2017 period. The fourth quarter 2017 net loss and net loss from operations included a charge of $36.4 million, or $0.86 per diluted share, related to the enactment of the Tax Cuts and Jobs Act of 2017 (TCJA).
For the year ended 2018, STFC had net income of $12.8 million, or $0.29 per diluted share, which included $45.3 million, or $1.04 per diluted share, of after-tax net unrealized loss on investments, compared to a net loss of $10.7 million1, or $0.251 per diluted share, for the same 2017 period. Net income from operations2 per diluted share for the year ended Dec. 31, 2018 was $1.20 versus a net loss from operations2 per diluted share of $1.261 for the same 2017 period. The year ended 2017 net loss and net loss from operations included the same charge of $36.4 million, or $0.86 per diluted share, related to the enactment of the TCJA.
GAAP Operating Results
STFC’s GAAP combined ratio for the fourth quarter 2018 was 94.6 compared to 100.71 for the same 2017 period. Catastrophe losses during the fourth quarter 2018 accounted for 2.6 points of the 56.8 total loss ratio points, or $8.1 million, versus 2.6 points of the total 62.71 loss ratio points, or $8.3 million, for the same period in 2017. Non-catastrophe losses during the fourth quarter 2018 included 7.9 points of favorable development relating to prior years, or $24.4 million versus 4.1 points, or $12.9 million, for the same period in 2017.
Net written premium for the fourth quarter of 2018 decreased 1.1% compared to the same period in 2017. By segment, net written premium for personal and commercial increased 13.9% and 3.9%, respectively, while the specialty segment reported negative written premium as a result of our exit from this business. The increase in the personal segment was primarily due to rate actions taken to improve the profitability in personal auto, new business growth, and a higher level of policies in force for the fourth quarter 2018 compared to the fourth quarter of 2017. The increase in the commercial segment was primarily driven by rate increases and a higher level of new business production from commercial auto and middle market commercial during the fourth quarter 2018 compared to the fourth quarter of 2017. Partially offsetting the increase was a decline in small commercial package new business during the fourth quarter 2018 compared to the fourth quarter 2017.
STFC’s GAAP combined ratio for the year ended 2018 was 100.6 compared to 107.71 for the same 2017 period. Catastrophe losses impacted the loss ratio for the year ended 2018 by 5.8 points, or $71.7 million, compared to 9.7 points, or $124.0 million for the year ended 2017. Non-catastrophe losses for the year ended 2018 included 6.2 points of favorable development relating to prior years, or $76.6 million, versus 3.2 points of favorable development, or $41.4 million, for the same period in 2017.
Net written premium for the year ended 2018 decreased 4.7% compared to the same 2017 period. By insurance segment, net written premium for the personal and commercial segments increased 19.1% and 3.6%, respectively, and the specialty segment decreased 93.2%, as a result of our exit from this business. The increases in net written premium in the personal and commercial segments were due to the same factors discussed above for the fourth quarter.

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The following information was filed by State Auto Financial Corp (STFC) on Thursday, February 14, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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