Le Lézard
Classified in: Business, Covid-19 virus
Subject: EARNINGS

State Auto Financial Reports Second Quarter 2020 Results


State Auto Financial Corporation (NASDAQ:STFC) today reported second quarter 2020 net income of $34.3 million, or $0.74 per diluted share, compared to a net loss of $6.2 million, or $0.14 per diluted share, for the same 2019 period. Net loss from operations1 per diluted share for the second quarter of 2020 was $0.59 versus $0.33 for the same 2019 period.

For the first six months of 2020, STFC had a net loss of $80.3 million, or $1.83 per diluted share, compared to net income of $43.2 million, or $1.00 per diluted share, for the same 2019 period. Net loss from operations1 per diluted share for the first six months of 2020 was $0.76 versus $0.01 for the same 2019 period.

GAAP Operating Results

STFC's GAAP combined ratio for the second quarter 2020 was 114.7 compared to 111.4 for the same 2019 period. Catastrophe losses during the second quarter 2020 accounted for 26.5 points of the 79.6 total loss ratio points, or $90.4 million, versus 15.4 points of the 76.3 total loss ratio points, or $47.4 million, for the same period in 2019. The second quarter 2020 was impacted by severe wind and hail events that impacted the South and Midwest, with approximately 60% of the catastrophe losses affecting our homeowners line of business. Non-catastrophe losses and ALAE during the second quarter 2020 included 0.6 points of favorable development relating to prior years, or $2.0 million, versus 5.5 points of favorable development, or $17.1 million, for the same period in 2019. Non-catastrophe losses and ALAE during the second quarter 2020 included 1.8 points of adverse development relating to prior years, or $6.2 million, versus 0.9 points of favorable development, or $2.8 million, for the same period in 2019 from specialty run-off.

STFC's GAAP combined ratio for the first six months of 2020 was 111.0 compared to 105.6 for the same 2019 period. Catastrophe losses for the first six months of 2020 accounted for 19.7 points of the 76.1 total loss ratio points, or $132.3 million, versus 10.7 points of the total 70.3 loss ratio points, or $65.1 million, for the same period in 2019. Non-catastrophe losses and ALAE for the first six months of 2020 included 1.9 points of favorable development relating to prior years, or $12.5 million, versus 6.2 points of favorable development, or $38.0 million, for the same period in 2019. Non-catastrophe losses and ALAE for the first six months of 2020 included 0.9 points of adverse development relating to prior years, or $6.1 million, versus 0.2 points of favorable development, or $1.5 million, for the same period in 2019 from specialty run-off.

SAP Personal and Commercial Operating Results

Net written premium for the second quarter 2020 increased 11.9% compared to the same period in 2019. By insurance segment, net written premium for the personal and commercial segments increased 10.0% and 14.7%, respectively. The increase in the personal segment was primarily due to new business growth and rate increases in homeowners and other personal. The improvement was partially offset by a decrease in net written premiums in personal auto due to a decline in new business. The increase in the commercial segment was led by new business growth and rate increases in commercial auto, middle market commercial, and farm & ranch. The improvement was partially offset by a decrease in net written premiums in workers' compensation due to (i) a decline in new business as a result of COVID-19, and (ii) continued intense competition in this market.

Net written premium for the first six months of 2020 increased 12.4% compared to the same period in 2019. Net written premium for the personal and commercial segments increased 10.2% and 16.1%, respectively. The trends in the personal and commercial net written premiums are due to the same factors discussed above for the second quarter.

The SAP personal and commercial segments' combined ratio2 for the second quarter 2020 was 111.5 compared to 109.9 for the same 2019 period. Catastrophe losses during the second quarter 2020 accounted for 26.5 points of the 77.9 total loss ratio points, or $90.4 million, versus 14.4 points of the 76.5 total loss ratio points, or $44.2 million, for the same period in 2019. Non-catastrophe losses and ALAE during the second quarter 2020 included 2.4 points of favorable development relating to prior years, or $8.2 million, versus 4.7 points of favorable development, or $14.3 million, for the same period in 2019.

The SAP personal and commercial segments' combined ratio for the first six months of 2020 was 109.4 compared to 104.9 for the same 2019 period. Catastrophe losses during the first six months of 2020 accounted for 19.7 points of the total 75.2 loss ratio points, or $132.2 million, versus 10.2 of the total 70.2 loss ratio points, or $61.4 million, for the same period in 2019. Non-catastrophe losses and ALAE during the first six months of 2020 included 2.8 points of favorable development relating to prior years, or $18.6 million, versus 6.0 points of favorable development, or $36.5 million, for the same period in 2019.

The exit from our specialty insurance business resulted in the elimination of specialty insurance as a reportable segment as it is no longer material to our results. Specialty results, labeled as "specialty run-off," are included in the SAP Insurance Segment Results table below to enable reconciliation to total underwriting results.

Book Value and Return on Equity

STFC's book value increased to $21.26 per share as of June 30, 2020, compared to $19.83 on March 31, 2020. The increase in book value was driven by the increase in the market value of our of our investment portfolio.

Return on stockholders' equity for the 12 months ended June 30, 2020, was (3.9)% compared to 6.0% for the 12 months ended June 30, 2019.

STFC's Chairman, President and CEO Mike LaRocco commented on the quarter as follows:

"During the second quarter, the State Auto team once again demonstrated our critical role in supporting our customers in their greatest times of need. From the ongoing COVID-19 pandemic to civil unrest and severe weather, our Claims and Risk Engineering (CARE) and Customer Service professionals once again delivered exceptional service.

"In personal lines, overall net written premium growth of 10% included 24% growth in our homeowners business. In personal auto, we continued the rollout of new rates that are being very well received by agents and customers. In commercial lines, every line other than workers' compensation grew, with overall net written premium growth of 14.7%.

"The combined ratio for our ongoing lines of business of 111.5, which included an unusually high level of catastrophe losses of 26.5 points, was disappointing, but reflects the nature of our business. I'm pleased that our non-cat performance showed good improvement at a 44.7. While we continue to see validation of our strategy through strong written premium growth of 11.9%, we know we must deliver consistent profitability. That remains our focus."

About State Auto Financial Corporation

State Auto Financial Corporation, headquartered in Columbus, Ohio, is a super regional property and casualty insurance holding company. STFC stock is traded on the Nasdaq Global Select Market, which represents the top fourth of all Nasdaq listed companies.

The insurance subsidiaries of State Auto Financial Corporation are part of the State Auto Group. The State Auto Group markets its insurance products throughout the United States, through independent insurance agencies. The State Auto Group is rated A- (Excellent) by the A.M. Best Company and includes State Automobile Mutual, State Auto Property & Casualty, State Auto Ohio, State Auto Wisconsin, Milbank, Meridian Security, Patrons Mutual, Rockhill Insurance, Plaza Insurance, American Compensation and Bloomington Compensation. Additional information on State Auto Financial Corporation and the State Auto Insurance Companies can be found online at http://www.StateAuto.com/STFC.

STFC has scheduled a conference call with interested investors for Thursday, August 6, at 11 a.m. ET to discuss the Company's second quarter 2020 performance. Live and archived broadcasts of the call can be accessed at http://www.StateAuto.com/STFC. A replay of the call can be heard beginning at 2 p.m., August 6, by calling 855-859-2056, conference ID 6944689. Supplemental schedules detailing the Company's second quarter 2020 financial, sales and underwriting results are made available on http://www.StateAuto.com/STFC prior to the conference call.

1 Net earnings (loss) from operations, a non-GAAP financial measure which management believes is informative to Company management and investors, differs from GAAP net income (loss) only by the exclusion of net investment gain (loss), net of applicable taxes, on investment activity for the periods being reported. For STFC, this amounted to income of $1.33 per diluted share for the second quarter of 2020 and a loss of $1.07 year to date 2020 versus income of $0.19 per diluted share for the second quarter 2019 and income of $1.01 year to date 2019.

2 Insurance industry regulators require STFC's insurance subsidiaries to report their financial condition and results of operations using Statutory Accounting Practices ("SAP"). The SAP personal and commercial segments' combined ratio is a measure used by management to evaluate STFC's operating performance for its ongoing operations.

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.

Selected Consolidated Financial Data

 

 

 

 

 

 

 

 

($ in millions, except per share amounts)

 

 

 

 

 

 

 

 

(unaudited)

 

Three months ended June 30

 

Six months ended June 30

 

 

2020

 

2019

 

2020

 

2019

Net premiums written

 

$

381.6

 

 

$

341.7

 

 

$

728.1

 

 

$

647.7

 

 

 

 

 

 

 

 

 

 

Earned premiums

 

340.7

 

 

307.7

 

 

671.2

 

 

610.4

 

Net investment income

 

17.7

 

 

21.7

 

 

36.6

 

 

41.1

 

Net investment gain (loss)

 

75.9

 

 

10.3

 

 

(59.3

)

 

55.2

 

Other income

 

0.5

 

 

0.4

 

 

1.1

 

 

1.0

 

Total revenue

 

434.8

 

 

340.1

 

 

649.6

 

 

707.7

 

 

 

 

 

 

 

 

 

 

Income (loss) before federal income taxes

 

41.6

 

 

(7.6

)

 

(102.4

)

 

54.0

 

 

 

 

 

 

 

 

 

 

Federal tax expense (benefit)

 

7.3

 

 

(1.4

)

 

(22.1

)

 

10.8

 

Net income (loss)

 

$

34.3

 

 

$

(6.2

)

 

$

(80.3

)

 

$

43.2

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

- basic

 

$

0.78

 

 

$

(0.14

)

 

$

(1.83

)

 

$

1.00

 

- diluted

 

$

0.74

 

 

$

(0.14

)

 

$

(1.83

)

 

$

1.00

 

Loss per share from operations(A):

 

 

 

 

 

 

 

 

- basic

 

$

(0.59

)

 

$

(0.33

)

 

$

(0.76

)

 

$

(0.01

)

- diluted

 

$

(0.59

)

 

$

(0.33

)

 

$

(0.76

)

 

$

(0.01

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

- basic

 

43.8

 

 

43.4

 

 

43.7

 

 

43.3

 

- diluted

 

44.1

 

 

43.4

 

 

43.7

 

 

43.9

 

Return on average equity (LTM)

 

(3.9

)%

 

6.0

%

 

 

 

 

Book value per share

 

$

21.26

 

 

$

21.07

 

 

 

 

 

Dividends paid per share

 

$

0.10

 

 

$

0.10

 

 

$

0.20

 

 

$

0.20

 

Total shares outstanding

 

43.8

 

 

43.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP ratios:

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

26.5

 

 

15.4

 

 

19.7

 

 

10.7

 

Non-cat loss and LAE ratio

 

53.1

 

 

60.9

 

 

56.4

 

 

59.6

 

Loss and LAE ratio

 

79.6

 

 

76.3

 

 

76.1

 

 

70.3

 

Expense ratio

 

35.1

 

 

35.1

 

 

34.9

 

 

35.3

 

Combined ratio

 

114.7

 

 

111.4

 

 

111.0

 

 

105.6

 

 

 

 

 

 

 

 

 

 

(A) Reconciliation of non-GAAP financial measure:

 

 

 

 

 

 

 

 

Net loss from operations:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

34.3

 

 

$

(6.2

)

 

$

(80.3

)

 

$

43.2

 

Net investment gain (loss), net of tax

 

59.9

 

 

8.1

 

 

(46.9

)

 

43.6

 

Net loss from operations

 

$

(25.6

)

 

$

(14.3

)

 

$

(33.4

)

 

$

(0.4

)

 

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

($ and shares in millions, except per share amounts)

 

 

 

 

(unaudited)

 

June 30

 

December 31

 

 

2020

 

2019

ASSETS

 

 

 

 

Fixed maturities, available-for-sale, at fair value (amortized cost $1,983.5 and $2,080.0, respectively)

 

$

2,097.9

 

 

$

2,127.9

 

Equity securities

 

354.6

 

 

395.2

 

Other invested assets

 

60.4

 

 

69.7

 

Other invested assets, at cost

 

12.5

 

 

6.5

 

Notes receivable from affiliate

 

70.0

 

 

70.0

 

Total investments

 

2,595.4

 

 

2,669.3

 

 

 

 

 

 

Cash and cash equivalents

 

174.6

 

 

78.0

 

Accrued investment income and other assets

 

31.1

 

 

31.7

 

Deferred policy acquisition costs

 

120.0

 

 

111.1

 

Reinsurance recoverable on losses and loss expenses payable

 

36.4

 

 

13.6

 

Prepaid reinsurance premiums

 

8.5

 

 

7.5

 

Due from affiliate

 

54.1

 

 

21.5

 

Current federal income taxes

 

6.7

 

 

6.3

 

Net deferred federal income taxes

 

49.2

 

 

42.2

 

Property and equipment, held for sale

 

4.2

 

 

4.2

 

Total assets

 

$

3,080.2

 

 

$

2,985.4

 

 

 

 

 

 

LIABILITIES

 

 

 

 

Losses and loss expenses payable

 

$

1,105.3

 

 

$

1,066.5

 

Unearned premiums

 

705.8

 

 

649.2

 

Notes payable (affiliates $15.3 and $15.2, respectively)

 

182.1

 

 

122.0

 

Pension and postretirement benefits

 

61.4

 

 

72.9

 

Other liabilities

 

95.1

 

 

114.9

 

Total liabilities

 

2,149.7

 

 

2,025.5

 

 

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

Common stock, without par value. Authorized 100.0 shares; 50.7 and 50.4 shares issued, respectively, at stated value of $2.50 per share

 

126.7

 

 

125.9

 

Treasury stock, 6.9 and 6.9 shares, respectively, at cost

 

(118.4

)

 

(117.5

)

Additional paid-in capital

 

211.1

 

 

206.7

 

Accumulated other comprehensive income (loss)

 

17.9

 

 

(37.9

)

Retained earnings

 

693.2

 

 

782.7

 

Total stockholders' equity

 

930.5

 

 

959.9

 

Total liabilities and stockholders' equity

 

$

3,080.2

 

 

$

2,985.4

 

 

 

 

 

 

Condensed Consolidated Statements of Income

 

 

 

 

($ in millions, except per share amounts)

 

 

 

 

 

 

 

 

(unaudited)

 

Three months ended June 30

 

Six months ended June 30

 

 

2020

 

2019

 

2020

 

2019

Earned premiums

 

$

340.7

 

 

$

307.7

 

 

$

671.2

 

 

$

610.4

 

Net investment income

 

17.7

 

 

21.7

 

 

36.6

 

 

41.1

 

Net investment gain (loss)

 

75.9

 

 

10.3

 

 

(59.3

)

 

55.2

 

Other income from affiliates

 

0.5

 

 

0.4

 

 

1.1

 

 

1.0

 

Total revenues

 

434.8

 

 

340.1

 

 

649.6

 

 

707.7

 

 

 

 

 

 

 

 

 

 

Losses and loss expenses

 

271.2

 

 

234.9

 

 

510.6

 

 

429.2

 

Acquisition and operating expenses

 

119.5

 

 

107.9

 

 

234.4

 

 

215.5

 

Interest expense

 

1.3

 

 

1.3

 

 

2.5

 

 

2.5

 

Other expenses

 

1.2

 

 

3.6

 

 

4.5

 

 

6.5

 

Total expenses

 

393.2

 

 

347.7

 

 

752.0

 

 

653.7

 

 

 

 

 

 

 

 

 

 

Income (loss) before federal income taxes

 

41.6

 

 

(7.6

)

 

(102.4

)

 

54.0

 

Federal income tax expense (benefit):

 

 

 

 

 

 

 

 

Current

 

(0.4

)

 

?

 

 

(0.4

)

 

(0.4

)

Deferred

 

7.7

 

 

(1.4

)

 

(21.7

)

 

11.2

 

Federal income tax expense (benefit)

 

7.3

 

 

(1.4

)

 

(22.1

)

 

10.8

 

Net income (loss)

 

$

34.3

 

 

$

(6.2

)

 

$

(80.3

)

 

$

43.2

 

Earnings (loss) per common share:

 

 

 

 

 

 

 

 

Basic

 

$

0.78

 

 

$

(0.14

)

 

$

(1.83

)

 

$

1.00

 

Diluted

 

$

0.74

 

 

$

(0.14

)

 

$

(1.83

)

 

$

1.00

 

Dividends paid per common share

 

$

0.10

 

 

$

0.10

 

 

$

0.20

 

 

$

0.20

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Comprehensive Income (Loss)

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

(unaudited)

Three months ended June 30

 

Six months ended June 30

 

2020

 

2019

 

2020

 

2019

Net income (loss)

$

34.3

 

 

$

(6.2

)

 

$

(80.3

)

 

$

43.2

 

Other comprehensive income, net of tax:

 

 

 

 

 

 

 

Net unrealized holding gain on available-for-sale investments:

 

 

 

 

 

 

 

Unrealized holding gain

38.9

 

 

34.7

 

 

69.9

 

 

69.2

 

Reclassification adjustments for gains realized in net income

(1.0

)

 

(1.5

)

 

(3.4

)

 

(1.6

)

Income tax expense

(7.9

)

 

(7.0

)

 

(13.9

)

 

(14.2

)

Total net unrealized holding gain on available- for-sale investments

30.0

 

 

26.2

 

 

52.6

 

 

53.4

 

Net unrecognized benefit plan obligations:

 

 

 

 

 

 

 

Reclassification adjustments for amortization to statements of income:

 

 

 

 

 

 

 

Prior service credit

(1.6

)

 

(1.6

)

 

(3.2

)

 

(3.2

)

Net actuarial loss

3.6

 

 

2.4

 

 

7.3

 

 

4.8

 

Income tax expense

(0.4

)

 

(0.1

)

 

(0.9

)

 

(0.3

)

Total net unrecognized benefit plan obligations

1.6

 

 

0.7

 

 

3.2

 

 

1.3

 

Other comprehensive income

31.6

 

 

26.9

 

 

55.8

 

 

54.7

 

Comprehensive income (loss)

$

65.9

 

 

$

20.7

 

 

$

(24.5

)

 

$

97.9

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Stockholders' Equity

($ and shares in millions)

 

 

 

 

(unaudited)

 

Six months ended

 

Year Ended

 

 

June 30

 

December 31

 

 

2020

 

2019

Common shares:

 

 

 

 

Balance at beginning of year

 

50.4

 

 

50.0

 

Issuance of shares

 

0.3

 

 

0.4

 

Balance at period ended

 

50.7

 

 

50.4

 

 

 

 

 

 

Treasury shares:

 

 

 

 

Balance at beginning of year

 

(6.9

)

 

(6.8

)

Shares acquired on stock award exercises and vested restricted shares

 

?

 

 

(0.1

)

Balance at period ended

 

(6.9

)

 

(6.9

)

 

 

 

 

 

Common stock:

 

 

 

 

Balance at beginning of year

 

$

125.9

 

 

$

125.0

 

Issuance of shares

 

0.8

 

 

0.9

 

Balance at period ended

 

126.7

 

 

125.9

 

 

 

 

 

 

Treasury stock:

 

 

 

 

Balance at beginning of year

 

$

(117.5

)

 

$

(117.0

)

Shares acquired on stock award exercises and vested restricted shares

 

(0.9

)

 

(0.5

)

Balance at beginning of year and period ended

 

(118.4

)

 

(117.5

)

 

 

 

 

 

Additional paid-in capital:

 

 

 

 

Balance at beginning of year

 

$

206.7

 

 

$

194.2

 

Issuance of common stock

 

2.2

 

 

5.1

 

Stock awards granted

 

2.2

 

 

7.4

 

Balance at period ended

 

211.1

 

 

206.7

 

 

 

 

 

 

Accumulated other comprehensive income (loss):

 

 

 

 

Balance at beginning of the year

 

$

(37.9

)

 

$

(96.4

)

Change in net unrealized holding gains on available-for-sale investments

 

52.6

 

 

60.6

 

Total net unrecognized benefit plan obligations

 

3.2

 

 

(2.1

)

Balance at period ended

 

17.9

 

 

(37.9

)

 

 

 

 

 

Retained earnings:

 

 

 

 

Balance at beginning of year

 

$

782.7

 

 

$

712.7

 

Cumulative effect of change in accounting to establish an allowance for expected credit losses at January 1, 2020

 

(0.5

)

 

?

 

Net (loss) income

 

(80.3

)

 

87.4

 

Cash dividends paid

 

(8.7

)

 

(17.4

)

Balance at period ended

 

693.2

 

 

782.7

 

Total stockholders' equity at period ended

 

$

930.5

 

 

$

959.9

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flow

($ in millions)

 

 

 

 

(unaudited)

 

Six months ended

 

 

June 30

 

 

2020

 

2019

Cash flows from operating activities:

 

 

 

 

Net (loss) income

 

$

(80.3

)

 

$

43.2

 

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

 

 

Depreciation and amortization, net

 

5.7

 

 

3.8

 

Share-based compensation

 

(0.5

)

 

4.4

 

Net investment loss (gain)

 

59.3

 

 

(55.2

)

Changes in operating assets and liabilities:

 

 

 

 

Deferred policy acquisition costs

 

(8.9

)

 

(7.2

)

Accrued investment income and other assets

 

0.6

 

 

1.8

 

Postretirement and pension benefits

 

(10.5

)

 

(11.3

)

Other liabilities and due to/from affiliates, net

 

(46.5

)

 

(79.1

)

Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums

 

(23.8

)

 

(3.4

)

Losses and loss expenses payable

 

38.2

 

 

(11.6

)

Unearned premiums

 

56.6

 

 

37.4

 

Deferred tax on share-based awards

 

(0.2

)

 

(0.6

)

Federal income taxes

 

(21.9

)

 

11.4

 

Net cash used in operating activities

 

(32.2

)

 

(66.4

)

Cash flows from investing activities:

 

 

 

 

Purchases of fixed maturities available-for-sale

 

(280.8

)

 

(334.8

)

Purchases of equity securities

 

(42.7

)

 

(30.4

)

Purchases of other invested assets

 

(6.9

)

 

(2.6

)

Maturities, calls and pay downs of fixed maturities available-for-sale

 

186.7

 

 

203.2

 

Sales of fixed maturities available-for-sale

 

188.3

 

 

198.7

 

Sales of equity securities

 

30.0

 

 

20.3

 

Sales of other invested assets

 

0.6

 

 

0.6

 

Disposals of property and equipment

 

0.2

 

 

1.6

 

Net cash provided by investing activities

 

75.4

 

 

56.6

 

Cash flows from financing activities:

 

 

 

 

Proceeds from issuance of common stock

 

3.0

 

 

4.0

 

Payments to acquire treasury stock

 

(0.9

)

 

(0.5

)

Payment of dividends

 

(8.7

)

 

(8.7

)

Proceeds from short-term debt

 

60.0

 

 

?

 

Net cash provided by (used in) financing activities

 

53.4

 

 

(5.2

)

Net increase (decrease) in cash and cash equivalents

 

96.6

 

 

(15.0

)

Cash and cash equivalents at beginning of period

 

78.0

 

 

59.8

 

Cash and cash equivalents at end of period

 

$

174.6

 

 

$

44.8

 

Supplemental disclosures:

 

 

 

 

Interest paid (affiliates $0.5 and $0.5, respectively)

 

$

2.3

 

 

$

2.3

 

 

 

 

 

 

Net Investment Income

($ in millions)

 

 

 

 

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

6/30/2019

 

9/30/2019

 

12/31/2019

 

3/31/2020

 

6/30/2020

Quarter to Date

 

 

 

 

 

 

 

 

 

 

Gross investment income:

 

 

 

 

 

 

 

 

 

 

Fixed maturities

 

$

14.7

 

$

14.4

 

$

13.9

 

$

14.5

 

$

14.8

 

TIPS

 

2.6

 

 

0.9

 

 

0.7

 

 

0.6

 

 

(0.3

)

Total fixed maturities

 

17.3

 

 

15.3

 

 

14.6

 

 

15.1

 

 

14.5

 

Equity securities

 

3.1

 

 

3.0

 

 

4.3

 

 

3.1

 

 

2.6

 

Other

 

1.4

 

 

1.1

 

 

1.3

 

 

1.0

 

 

0.8

 

Total gross investment income

 

21.8

 

 

19.4

 

 

20.2

 

 

19.2

 

 

17.9

 

Less: Investment expenses

 

0.1

 

 

0.1

 

 

0.2

 

 

0.3

 

 

0.2

 

Net investment income

 

$

21.7

 

 

$

19.3

 

 

$

20.0

 

 

$

18.9

 

 

$

17.7

 

 

 

 

 

 

 

 

 

 

 

 

Year to Date

 

 

 

 

 

 

 

 

 

 

Gross investment income:

 

 

 

 

 

 

 

 

 

 

Fixed maturities

 

$

30.1

 

 

$

44.5

 

 

$

58.4

 

 

$

14.5

 

 

$

29.3

 

TIPS

 

2.3

 

 

3.2

 

 

3.9

 

 

0.6

 

 

0.3

 

Total fixed maturities

 

32.4

 

 

47.7

 

 

62.3

 

 

15.1

 

 

29.6

 

Equity securities

 

5.9

 

 

8.9

 

 

13.2

 

 

3.1

 

 

5.7

 

Other

 

3.1

 

 

4.2

 

 

5.5

 

 

1.0

 

 

1.8

 

Total gross investment income

 

41.4

 

 

60.8

 

 

81.0

 

 

19.2

 

 

37.1

 

Less: Investment expenses

 

0.3

 

 

0.4

 

 

0.6

 

 

0.3

 

 

0.5

 

Net investment income

 

$

41.1

 

 

$

60.4

 

 

$

80.4

 

 

$

18.9

 

 

$

36.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6/30/2019

 

9/30/2019

 

12/31/2019

 

3/31/2020

 

6/30/2020

TIPS, fair value

 

$

145.2

 

 

$

135.3

 

 

$

135.6

 

 

$

111.4

 

 

$

115.9

 

TIPS, book value

 

$

137.4

 

 

$

125.9

 

 

$

126.2

 

 

$

101.5

 

 

$

100.9

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Gain (Loss)

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

unaudited

Three months ended June 30

 

Six months ended June 30

 

2020

 

2019

 

2020

 

2019

Investment gain (loss), net:

 

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

 

Realized gains on sales of securities

$

1.9

 

 

$

1.5

 

 

$

5.5

 

 

$

1.6

 

Realized losses on sales of securities

(0.9

)

 

?

 

 

(2.1

)

 

?

 

Net gain on fixed maturities

1.0

 

 

1.5

 

 

3.4

 

 

1.6

 

Equity securities:

 

 

 

 

 

 

 

Realized (losses) gains on sales of securities, net

(9.5

)

 

1.2

 

 

(8.6

)

 

(0.7

)

Unrealized gain (loss) on securities still held, net

78.6

 

 

6.4

 

 

(44.7

)

 

50.5

 

Net gain (loss) on equity securities

69.1

 

 

7.6

 

 

(53.3

)

 

49.8

 

Other invested assets:

 

 

 

 

 

 

 

Unrealized gain (loss) on securities still held, net

5.8

 

 

1.2

 

 

(9.6

)

 

5.1

 

Net gain (loss) on other invested assets

5.8

 

 

1.2

 

 

(9.6

)

 

5.1

 

Other net realized gain (loss)

?

 

 

?

 

 

0.2

 

 

(1.3

)

Net gain (loss) on investments

$

75.9

 

 

$

10.3

 

 

$

(59.3

)

 

$

55.2

 

 

 

 

 

 

 

 

 

Income Taxes

 

 

 

($ in millions)

 

 

 

 

(unaudited)

 

 

 

 

The following table sets forth the tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities:

 

 

 

June 30

December 31

 

 

 

2020

 

2020

 

Deferred tax assets:

 

 

 

Unearned premiums not currently deductible

$

29.4

 

$

27.0

 

 

Losses and loss expenses payable discounting

 

11.4

 

 

10.6

 

 

Postretirement and pension benefits

 

18.0

 

 

20.0

 

 

Other liabilities

 

10.7

 

 

13.4

 

 

Net operating loss carryforward

 

25.8

 

 

12.1

 

 

Tax credit carryforward

 

2.0

 

 

2.5

 

 

Other

 

0.2

 

 

1.1

 

 

Total deferred tax assets

 

97.5

 

 

86.7

 

 

Deferred tax liabilities:

 

 

 

Deferral of policy acquisition costs

 

25.2

 

 

23.3

 

 

Investments

 

23.1

 

 

21.2

 

 

Total deferred tax liabilities

 

48.3

 

 

44.5

 

 

Net deferred federal income taxes

$

49.2

 

$

42.2

 

 

 

 

 

 

 

The following table sets forth the components of federal income tax expense (benefit):

 

 

Three months ended June 30

Six months ended June 30

 

2020

 

2019

 

2020

 

2019

Income (loss) before federal income taxes

$

41.6

 

$

(7.6

)

$

(102.4

)

$

54.0

 

Federal income tax expense (benefit)

 

 

 

 

Current

 

(0.4

)

 

?

 

 

(0.4

)

 

(0.4

)

Deferred

 

7.7

 

 

(1.4

)

 

(21.7

)

 

11.2

 

Total federal income tax expense (benefit)

 

7.3

 

 

(1.4

)

 

(22.1

)

 

10.8

 

Net income (loss)

$

34.3

 

$

(6.2

)

$

(80.3

)

$

43.2

 

 

 

 

 

 

SAP Personal Insurance Segment Results

(unaudited)

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

Three months ended June 30, 2020

 

Personal Auto

 

Homeowners

 

Other Personal

 

Total

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

104.3

 

 

 

$

106.1

 

 

 

$

15.0

 

 

 

$

225.4

 

 

Net earned premiums

 

103.3

 

 

 

87.7

 

 

 

11.8

 

 

 

202.8

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

4.1

 

 

 

54.6

 

 

 

7.6

 

 

 

66.3

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

5.9

 

 

 

(0.1

)

 

 

(0.1

)

 

 

5.7

 

 

Current accident year non-cat loss and ALAE

 

45.5

 

 

 

36.7

 

 

 

3.9

 

 

 

86.1

 

 

Total non-cat loss and ALAE

 

51.4

 

 

 

36.6

 

 

 

3.8

 

 

 

91.8

 

 

Total Loss and ALAE

 

55.5

 

 

 

91.2

 

 

 

11.4

 

 

 

158.1

 

 

ULAE

 

8.3

 

 

 

6.5

 

 

 

0.6

 

 

 

15.4

 

 

Total Loss and LAE

 

63.8

 

 

 

97.7

 

 

 

12.0

 

 

 

173.5

 

 

Underwriting expenses

 

33.7

 

 

 

31.5

 

 

 

4.5

 

 

 

69.7

 

 

Net underwriting gain (loss)

 

$

5.8

 

 

 

$

(41.5

)

 

 

$

(4.7

)

 

 

$

(40.4

)

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

4.0

 

%

 

62.3

 

%

 

64.3

 

%

 

32.7

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

5.7

 

%

 

(0.2

)

%

 

(0.8

)

%

 

2.8

 

%

Current accident year non-cat loss and ALAE ratio

 

44.0

 

%

 

41.8

 

%

 

33.2

 

%

 

42.4

 

%

Total non-cat loss and ALAE ratio

 

49.7

 

%

 

41.6

 

%

 

32.4

 

%

 

45.2

 

%

Total Loss and ALAE ratio

 

53.7

 

%

 

103.9

 

%

 

96.7

 

%

 

77.9

 

%

ULAE ratio

 

8.1

 

%

 

7.5

 

%

 

4.8

 

%

 

7.6

 

%

Total Loss and LAE ratio

 

61.8

 

%

 

111.4

 

%

 

101.5

 

%

 

85.5

 

%

Expense ratio

 

32.3

 

%

 

29.7

 

%

 

30.6

 

%

 

31.0

 

%

Combined ratio

 

94.1

 

%

 

141.1

 

%

 

132.1

 

%

 

116.5

 

%

($ in millions)

 

 

 

 

 

 

 

 

Three months ended June 30, 2019

 

Personal Auto

 

Homeowners

 

Other Personal

 

Total

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

110.0

 

 

 

$

85.5

 

 

 

$

9.4

 

 

 

$

204.9

 

 

Net earned premiums

 

108.4

 

 

 

71.8

 

 

 

8.1

 

 

 

188.3

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

3.6

 

 

 

28.4

 

 

 

3.0

 

 

 

35.0

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(3.0

)

 

 

(0.1

)

 

 

(0.3

)

 

 

(3.4

)

 

Current accident year non-cat loss and ALAE

 

69.0

 

 

 

39.3

 

 

 

3.6

 

 

 

111.9

 

 

Total non-cat loss and ALAE

 

66.0

 

 

 

39.2

 

 

 

3.3

 

 

 

108.5

 

 

Total Loss and ALAE

 

69.6

 

 

 

67.6

 

 

 

6.3

 

 

 

143.5

 

 

ULAE

 

7.6

 

 

 

5.5

 

 

 

0.4

 

 

 

13.5

 

 

Total Loss and LAE

 

77.2

 

 

 

73.1

 

 

 

6.7

 

 

 

157.0

 

 

Underwriting expenses

 

33.1

 

 

 

25.2

 

 

 

2.9

 

 

 

61.2

 

 

Net underwriting loss

 

$

(1.9

)

 

 

$

(26.5

)

 

 

$

(1.5

)

 

 

$

(29.9

)

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

3.3

 

%

 

39.5

 

%

 

37.3

 

%

 

18.6

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(2.7

)

%

 

(0.2

)

%

 

(4.6

)

%

 

(1.8

)

%

Current accident year non-cat loss and ALAE ratio

 

63.7

 

%

 

54.6

 

%

 

45.5

 

%

 

59.4

 

%

Total non-cat loss and ALAE ratio

 

61.0

 

%

 

54.4

 

%

 

40.9

 

%

 

57.6

 

%

Total Loss and ALAE ratio

 

64.3

 

%

 

93.9

 

%

 

78.2

 

%

 

76.2

 

%

ULAE ratio

 

7.0

 

%

 

7.7

 

%

 

5.1

 

%

 

7.2

 

%

Total Loss and LAE ratio

 

71.3

 

%

 

101.6

 

%

 

83.3

 

%

 

83.4

 

%

Expense ratio

 

30.0

 

%

 

29.6

 

%

 

30.8

 

%

 

29.9

 

%

Combined ratio

 

101.3

 

%

 

131.2

 

%

 

114.1

 

%

 

113.3

 

%

($ in millions)

 

 

 

 

 

 

 

 

Six months ended June 30, 2020

 

Personal Auto

 

Homeowners

 

Other Personal

 

Total

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

208.9

 

 

 

$

187.7

 

 

 

$

28.3

 

 

 

$

424.9

 

 

Net earned premiums

 

208.0

 

 

 

170.4

 

 

 

22.5

 

 

 

400.9

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

4.6

 

 

 

65.3

 

 

 

9.1

 

 

 

79.0

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

11.1

 

 

 

2.1

 

 

 

(1.1

)

 

 

12.1

 

 

Current accident year non-cat loss and ALAE

 

107.5

 

 

 

74.3

 

 

 

8.2

 

 

 

190.0

 

 

Total non-cat loss and ALAE

 

118.6

 

 

 

76.4

 

 

 

7.1

 

 

 

202.1

 

 

Total Loss and ALAE

 

123.2

 

 

 

141.7

 

 

 

16.2

 

 

 

281.1

 

 

ULAE

 

15.6

 

 

 

11.8

 

 

 

1.0

 

 

 

28.4

 

 

Total Loss and LAE

 

138.8

 

 

 

153.5

 

 

 

17.2

 

 

 

309.5

 

 

Underwriting expenses

 

66.5

 

 

 

56.5

 

 

 

8.5

 

 

 

131.5

 

 

Net underwriting gain (loss)

 

$

2.7

 

 

 

$

(39.6

)

 

 

$

(3.2

)

 

 

$

(40.1

)

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

2.2

 

%

 

38.3

 

%

 

40.4

 

%

 

19.7

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

5.4

 

%

 

1.2

 

%

 

(4.8

)

%

 

3.0

 

%

Current accident year non-cat loss and ALAE ratio

 

51.6

 

%

 

43.7

 

%

 

36.4

 

%

 

47.4

 

%

Total non-cat loss and ALAE ratio

 

57.0

 

%

 

44.9

 

%

 

31.6

 

%

 

50.4

 

%

Total Loss and ALAE ratio

 

59.2

 

%

 

83.2

 

%

 

72.0

 

%

 

70.1

 

%

ULAE ratio

 

7.5

 

%

 

6.9

 

%

 

4.4

 

%

 

7.1

 

%

Total Loss and LAE ratio

 

66.7

 

%

 

90.1

 

%

 

76.4

 

%

 

77.2

 

%

Expense ratio

 

31.9

 

%

 

30.1

 

%

 

30.3

 

%

 

31.0

 

%

Combined ratio

 

98.6

 

%

 

120.2

 

%

 

106.7

 

%

 

108.2

 

%

($ in millions)

 

 

 

 

 

 

 

 

Six months ended June 30, 2019

 

Personal Auto

 

Homeowners

 

Other Personal

 

Total

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

217.7

 

 

 

$

149.9

 

 

 

$

17.8

 

 

 

$

385.4

 

 

Net earned premiums

 

213.8

 

 

 

140.5

 

 

 

15.5

 

 

 

369.8

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

4.5

 

 

 

40.8

 

 

 

3.7

 

 

 

49.0

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(9.8

)

 

 

0.5

 

 

 

(1.0

)

 

 

(10.3

)

 

Current accident year non-cat loss and ALAE

 

134.8

 

 

 

69.2

 

 

 

8.0

 

 

 

212.0

 

 

Total non-cat loss and ALAE

 

125.0

 

 

 

69.7

 

 

 

7.0

 

 

 

201.7

 

 

Total Loss and ALAE

 

129.5

 

 

 

110.5

 

 

 

10.7

 

 

 

250.7

 

 

ULAE

 

14.8

 

 

 

10.7

 

 

 

0.7

 

 

 

26.2

 

 

Total Loss and LAE

 

144.3

 

 

 

121.2

 

 

 

11.4

 

 

 

276.9

 

 

Underwriting expenses

 

65.8

 

 

 

47.0

 

 

 

5.8

 

 

 

118.6

 

 

Net underwriting gain (loss)

 

$

3.7

 

 

 

$

(27.7

)

 

 

$

(1.7

)

 

 

$

(25.7

)

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

2.1

 

%

 

29.0

 

%

 

24.0

 

%

 

13.2

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(4.6

)

%

 

0.4

 

%

 

(6.6

)

%

 

(2.8

)

%

Current accident year non-cat loss and ALAE ratio

 

63.1

 

%

 

49.2

 

%

 

51.8

 

%

 

57.3

 

%

Total non-cat loss and ALAE ratio

 

58.5

 

%

 

49.6

 

%

 

45.2

 

%

 

54.5

 

%

Total Loss and ALAE ratio

 

60.6

 

%

 

78.6

 

%

 

69.2

 

%

 

67.7

 

%

ULAE ratio

 

6.9

 

%

 

7.6

 

%

 

4.6

 

%

 

7.1

 

%

Total Loss and LAE ratio

 

67.5

 

%

 

86.2

 

%

 

73.8

 

%

 

74.8

 

%

Expense ratio

 

30.2

 

%

 

31.4

 

%

 

32.6

 

%

 

30.8

 

%

Combined ratio

 

97.7

 

%

 

117.6

 

%

 

106.4

 

%

 

105.6

 

%

SAP Commercial Insurance Segment Results

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months
ended

June 30, 2020

 

Commercial
Auto

 

Small
Commercial
Package

 

Middle Market
Commercial

 

Workers'
Comp

 

Farm &
Ranch

 

Other
Commercial

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

41.4

 

 

 

$

32.5

 

 

 

$

46.5

 

 

 

$

13.0

 

 

 

$

17.5

 

 

 

$

5.4

 

 

 

$

156.3

 

 

Net earned premiums

 

31.6

 

 

 

31.1

 

 

 

39.6

 

 

 

17.2

 

 

 

13.7

 

 

 

4.7

 

 

 

137.9

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

0.7

 

 

 

11.9

 

 

 

6.9

 

 

 

?

 

 

 

4.6

 

 

 

?

 

 

 

24.1

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(0.2

)

 

 

(3.6

)

 

 

(2.9

)

 

 

(4.8

)

 

 

(0.3

)

 

 

(2.1

)

 

 

(13.9

)

 

Current accident year non-cat loss and ALAE

 

15.0

 

 

 

17.2

 

 

 

22.0

 

 

 

12.8

 

 

 

6.1

 

 

 

1.3

 

 

 

74.4

 

 

Total non-cat loss and ALAE

 

14.8

 

 

 

13.6

 

 

 

19.1

 

 

 

8.0

 

 

 

5.8

 

 

 

(0.8

)

 

 

60.5

 

 

Total Loss and ALAE

 

15.5

 

 

 

25.5

 

 

 

26.0

 

 

 

8.0

 

 

 

10.4

 

 

 

(0.8

)

 

 

84.6

 

 

ULAE

 

1.7

 

 

 

2.1

 

 

 

1.1

 

 

 

1.7

 

 

 

0.6

 

 

 

0.1

 

 

 

7.3

 

 

Total Loss and LAE

 

17.2

 

 

 

27.6

 

 

 

27.1

 

 

 

9.7

 

 

 

11.0

 

 

 

(0.7

)

 

 

91.9

 

 

Underwriting expenses

 

13.7

 

 

 

11.3

 

 

 

17.7

 

 

 

6.0

 

 

 

7.7

 

 

 

2.0

 

 

 

58.4

 

 

Net underwriting gain (loss)

 

$

0.7

 

 

 

$

(7.8

)

 

 

$

(5.2

)

 

 

$

1.5

 

 

 

$

(5.0

)

 

 

$

3.4

 

 

 

$

(12.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

2.0

 

%

 

38.4

 

%

 

17.6

 

%

 

?

 

%

 

33.4

 

%

 

(0.1

)

%

 

17.5

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(0.6

)

%

 

(11.7

)

%

 

(7.3

)

%

 

(28.0

)

%

 

(2.0

)

%

 

(43.9

)

%

 

(10.1

)

%

Current accident year non-cat loss and ALAE ratio

 

47.7

 

%

 

55.3

 

%

 

55.4

 

%

 

74.3

 

%

 

45.2

 

%

 

27.5

 

%

 

54.0

 

%

Total non-cat loss and ALAE ratio

 

47.1

 

%

 

43.6

 

%

 

48.1

 

%

 

46.3

 

%

 

43.2

 

%

 

(16.4

)

%

 

43.9

 

%

Total Loss and ALAE ratio

 

49.1

 

%

 

82.0

 

%

 

65.7

 

%

 

46.3

 

%

 

76.6

 

%

 

(16.5

)

%

 

61.4

 

%

ULAE ratio

 

5.3

 

%

 

6.7

 

%

 

2.8

 

%

 

9.9

 

%

 

4.5

 

%

 

1.8

 

%

 

5.3

 

%

Total Loss and LAE ratio

 

54.4

 

%

 

88.7

 

%

 

68.5

 

%

 

56.2

 

%

 

81.1

 

%

 

(14.7

)

%

 

66.7

 

%

Expense ratio

 

33.1

 

%

 

34.8

 

%

 

38.1

 

%

 

45.5

 

%

 

43.4

 

%

 

37.6

 

%

 

37.3

 

%

Combined ratio

 

87.5

 

%

 

123.5

 

%

 

106.6

 

%

 

101.7

 

%

 

124.5

 

%

 

22.9

 

%

 

104.0

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended
June 30, 2019

 

Commercial
Auto

 

Small
Commercial
Package

 

Middle Market
Commercial

 

Workers'
Comp

 

Farm &
Ranch

 

Other
Commercial

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

29.7

 

 

 

$

31.5

 

 

 

$

41.1

 

 

 

$

15.4

 

 

 

$

13.6

 

 

 

$

5.0

 

 

 

$

136.3

 

 

Net earned premiums

 

21.8

 

 

 

29.4

 

 

 

32.5

 

 

 

18.1

 

 

 

12.0

 

 

 

4.2

 

 

 

118.0

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

?

 

 

 

3.5

 

 

 

3.9

 

 

 

?

 

 

 

1.8

 

 

 

?

 

 

 

9.2

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(1.0

)

 

 

(2.9

)

 

 

(2.9

)

 

 

(4.5

)

 

 

(0.8

)

 

 

1.2

 

 

 

(10.9

)

 

Current accident year non-cat loss and ALAE

 

14.1

 

 

 

17.5

 

 

 

16.5

 

 

 

14.8

 

 

 

6.7

 

 

 

2.4

 

 

 

72.0

 

 

Total non-cat loss and ALAE

 

13.1

 

 

 

14.6

 

 

 

13.6

 

 

 

10.3

 

 

 

5.9

 

 

 

3.6

 

 

 

61.1

 

 

Total Loss and ALAE

 

13.1

 

 

 

18.1

 

 

 

17.5

 

 

 

10.3

 

 

 

7.7

 

 

 

3.6

 

 

 

70.3

 

 

ULAE

 

1.3

 

 

 

1.7

 

 

 

1.7

 

 

 

2.0

 

 

 

0.5

 

 

 

0.2

 

 

 

7.4

 

 

Total Loss and LAE

 

14.4

 

 

 

19.8

 

 

 

19.2

 

 

 

12.3

 

 

 

8.2

 

 

 

3.8

 

 

 

77.7

 

 

Underwriting expenses

 

11.0

 

 

 

11.8

 

 

 

15.9

 

 

 

5.6

 

 

 

6.5

 

 

 

1.9

 

 

 

52.7

 

 

Net underwriting (loss) gain

 

$

(3.6

)

 

 

$

(2.2

)

 

 

$

(2.6

)

 

 

$

0.2

 

 

 

$

(2.7

)

 

 

$

(1.5

)

 

 

$

(12.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

0.2

 

%

 

11.8

 

%

 

11.8

 

%

 

?

 

%

 

15.1

 

%

 

?

 

%

 

7.8

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(5.0

)

%

 

(10.0

)

%

 

(8.7

)

%

 

(24.7

)

%

 

(6.2

)

%

 

28.4

 

%

 

(9.2

)

%

Current accident year non-cat loss and ALAE ratio

 

64.8

 

%

 

59.3

 

%

 

50.8

 

%

 

81.4

 

%

 

56.0

 

%

 

55.8

 

%

 

60.9

 

%

Total non-cat loss and ALAE ratio

 

59.8

 

%

 

49.3

 

%

 

42.1

 

%

 

56.7

 

%

 

49.8

 

%

 

84.2

 

%

 

51.7

 

%

Total Loss and ALAE ratio

 

60.0

 

%

 

61.1

 

%

 

53.9

 

%

 

56.7

 

%

 

64.9

 

%

 

84.2

 

%

 

59.5

 

%

ULAE ratio

 

6.1

 

%

 

5.9

 

%

 

5.2

 

%

 

10.7

 

%

 

4.3

 

%

 

4.5

 

%

 

6.3

 

%

Total Loss and LAE ratio

 

66.1

 

%

 

67.0

 

%

 

59.1

 

%

 

67.4

 

%

 

69.2

 

%

 

88.7

 

%

 

65.8

 

%

Expense ratio

 

36.9

 

%

 

37.2

 

%

 

38.7

 

%

 

36.8

 

%

 

47.5

 

%

 

38.7

 

%

 

38.6

 

%

Combined ratio

 

103.0

 

%

 

104.2

 

%

 

97.8

 

%

 

104.2

 

%

 

116.7

 

%

 

127.4

 

%

 

104.4

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended
June 30, 2020

 

Commercial
Auto

 

Small
Commercial
Package

 

Middle Market
Commercial

 

Workers'
Comp

 

Farm &
Ranch

 

Other
Commercial

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

77.8

 

 

 

$

64.4

 

 

 

$

86.8

 

 

 

$

31.8

 

 

 

$

32.3

 

 

 

$

10.3

 

 

 

$

303.4

 

 

Net earned premiums

 

60.6

 

 

 

61.4

 

 

 

75.7

 

 

 

36.9

 

 

 

26.3

 

 

 

9.4

 

 

 

270.3

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

1.0

 

 

 

15.5

 

 

 

31.0

 

 

 

?

 

 

 

5.5

 

 

 

0.2

 

 

 

53.2

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(0.3

)

 

 

(9.0

)

 

 

(8.0

)

 

 

(8.8

)

 

 

(1.1

)

 

 

(3.5

)

 

 

(30.7

)

 

Current accident year non-cat loss and ALAE

 

31.6

 

 

 

36.3

 

 

 

49.5

 

 

 

26.2

 

 

 

10.1

 

 

 

4.3

 

 

 

158.0

 

 

Total non-cat loss and ALAE

 

31.3

 

 

 

27.3

 

 

 

41.5

 

 

 

17.4

 

 

 

9.0

 

 

 

0.8

 

 

 

127.3

 

 

Total Loss and ALAE

 

32.3

 

 

 

42.8

 

 

 

72.5

 

 

 

17.4

 

 

 

14.5

 

 

 

1.0

 

 

 

180.5

 

 

ULAE

 

3.2

 

 

 

3.7

 

 

 

3.2

 

 

 

3.4

 

 

 

1.1

 

 

 

0.3

 

 

 

14.9

 

 

Total Loss and LAE

 

35.5

 

 

 

46.5

 

 

 

75.7

 

 

 

20.8

 

 

 

15.6

 

 

 

1.3

 

 

 

195.4

 

 

Underwriting expenses

 

26.4

 

 

 

23.1

 

 

 

34.4

 

 

 

14.9

 

 

 

14.4

 

 

 

4.1

 

 

 

117.3

 

 

Net underwriting (loss) gain

 

$

(1.3

)

 

 

$

(8.2

)

 

 

$

(34.4

)

 

 

$

1.2

 

 

 

$

(3.7

)

 

 

$

4.0

 

 

 

$

(42.4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

1.6

 

%

 

25.3

 

%

 

41.0

 

%

 

?

 

%

 

20.8

 

%

 

1.9

 

%

 

19.7

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(0.4

)

%

 

(14.7

)

%

 

(10.6

)

%

 

(24.0

)

%

 

(4.1

)

%

 

(36.9

)

%

 

(11.4

)

%

Current accident year non-cat loss and ALAE ratio

 

52.2

 

%

 

59.1

 

%

 

65.4

 

%

 

71.1

 

%

 

38.7

 

%

 

45.5

 

%

 

58.5

 

%

Total non-cat loss and ALAE ratio

 

51.8

 

%

 

44.4

 

%

 

54.8

 

%

 

47.1

 

%

 

34.6

 

%

 

8.6

 

%

 

47.1

 

%

Total Loss and ALAE ratio

 

53.4

 

%

 

69.7

 

%

 

95.8

 

%

 

47.1

 

%

 

55.4

 

%

 

10.5

 

%

 

66.8

 

%

ULAE ratio

 

5.2

 

%

 

6.0

 

%

 

4.2

 

%

 

9.3

 

%

 

4.2

 

%

 

2.9

 

%

 

5.5

 

%

Total Loss and LAE ratio

 

58.6

 

%

 

75.7

 

%

 

100.0

 

%

 

56.4

 

%

 

59.6

 

%

 

13.4

 

%

 

72.3

 

%

Expense ratio

 

34.0

 

%

 

35.9

 

%

 

39.6

 

%

 

46.8

 

%

 

44.4

 

%

 

39.6

 

%

 

38.6

 

%

Combined ratio

 

92.6

 

%

 

111.6

 

%

 

139.6

 

%

 

103.2

 

%

 

104.0

 

%

 

53.0

 

%

 

110.9

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended
June 30, 2019

 

Commercial
Auto

 

Small
Commercial
Package

 

Middle Market
Commercial

 

Workers'
Comp

 

Farm &
Ranch

 

Other
Commercial

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net written premiums

 

$

53.7

 

 

 

$

62.0

 

 

 

$

75.3

 

 

 

$

34.9

 

 

 

$

26.0

 

 

 

$

9.5

 

 

 

$

261.4

 

 

Net earned premiums

 

41.5

 

 

 

59.0

 

 

 

63.2

 

 

 

38.6

 

 

 

23.8

 

 

 

8.3

 

 

 

234.4

 

 

Losses and LAE incurred:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE

 

0.1

 

 

 

5.0

 

 

 

5.2

 

 

 

?

 

 

 

2.1

 

 

 

?

 

 

 

12.4

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(2.5

)

 

 

(7.7

)

 

 

(6.0

)

 

 

(9.0

)

 

 

(1.2

)

 

 

0.2

 

 

 

(26.2

)

 

Current accident year non-cat loss and ALAE

 

26.0

 

 

 

33.4

 

 

 

42.5

 

 

 

28.4

 

 

 

11.8

 

 

 

4.5

 

 

 

146.6

 

 

Total non-cat loss and ALAE

 

23.5

 

 

 

25.7

 

 

 

36.5

 

 

 

19.4

 

 

 

10.6

 

 

 

4.7

 

 

 

120.4

 

 

Total Loss and ALAE

 

23.6

 

 

 

30.7

 

 

 

41.7

 

 

 

19.4

 

 

 

12.7

 

 

 

4.7

 

 

 

132.8

 

 

ULAE

 

2.6

 

 

 

3.5

 

 

 

3.0

 

 

 

3.6

 

 

 

1.1

 

 

 

0.4

 

 

 

14.2

 

 

Total Loss and LAE

 

26.2

 

 

 

34.2

 

 

 

44.7

 

 

 

23.0

 

 

 

13.8

 

 

 

5.1

 

 

 

147.0

 

 

Underwriting expenses

 

21.7

 

 

 

24.3

 

 

 

30.1

 

 

 

13.0

 

 

 

12.7

 

 

 

3.9

 

 

 

105.7

 

 

Net underwriting (loss) gain

 

$

(6.4

)

 

 

$

0.5

 

 

 

$

(11.6

)

 

 

$

2.6

 

 

 

$

(2.7

)

 

 

$

(0.7

)

 

 

$

(18.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

0.3

 

%

 

8.5

 

%

 

8.2

 

%

 

?

 

%

 

8.7

 

%

 

?

 

%

 

5.3

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(6.1

)

%

 

(13.1

)

%

 

(9.4

)

%

 

(23.2

)

%

 

(4.9

)

%

 

2.8

 

%

 

(11.1

)

%

Current accident year non-cat loss and ALAE ratio

 

62.6

 

%

 

56.5

 

%

 

67.3

 

%

 

73.4

 

%

 

49.6

 

%

 

54.2

 

%

 

62.5

 

%

Total non-cat loss and ALAE ratio

 

56.5

 

%

 

43.4

 

%

 

57.9

 

%

 

50.2

 

%

 

44.7

 

%

 

57.0

 

%

 

51.4

 

%

Total Loss and ALAE ratio

 

56.8

 

%

 

51.9

 

%

 

66.1

 

%

 

50.2

 

%

 

53.4

 

%

 

57.0

 

%

 

56.7

 

%

ULAE ratio

 

6.3

 

%

 

6.0

 

%

 

4.7

 

%

 

9.3

 

%

 

4.6

 

%

 

4.4

 

%

 

6.1

 

%

Total Loss and LAE ratio

 

63.1

 

%

 

57.9

 

%

 

70.8

 

%

 

59.5

 

%

 

58.0

 

%

 

61.4

 

%

 

62.8

 

%

Expense ratio

 

40.5

 

%

 

39.1

 

%

 

39.9

 

%

 

37.4

 

%

 

48.7

 

%

 

41.5

 

%

 

40.4

 

%

Combined ratio

 

103.6

 

%

 

97.0

 

%

 

110.7

 

%

 

96.9

 

%

 

106.7

 

%

 

102.9

 

%

 

103.2

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SAP Insurance Segment Results

(unaudited)

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

Three months ended June 30, 2020

 

Personal &
Commercial

 

Specialty run-off

 

Total

 

 

 

 

 

 

 

Net written premiums

 

$

381.7

 

 

 

$

(0.1

)

 

 

$

381.6

 

 

Net earned premiums

 

340.7

 

 

 

?

 

 

 

340.7

 

 

Losses and LAE incurred:

 

 

 

 

 

 

Cat loss and ALAE

 

90.4

 

 

 

?

 

 

 

90.4

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(8.2

)

 

 

6.2

 

 

 

(2.0

)

 

Current accident year non-cat loss and ALAE

 

160.5

 

 

 

?

 

 

 

160.5

 

 

Total non-cat loss and ALAE

 

152.3

 

 

 

6.2

 

 

 

158.5

 

 

Total Loss and ALAE

 

242.7

 

 

 

6.2

 

 

 

248.9

 

 

ULAE

 

22.7

 

 

 

?

 

 

 

22.7

 

 

Total Loss and LAE

 

265.4

 

 

 

6.2

 

 

 

271.6

 

 

Underwriting expenses

 

128.1

 

 

 

0.1

 

 

 

128.2

 

 

Net underwriting loss

 

$

(52.8

)

 

 

$

(6.3

)

 

 

$

(59.1

)

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

26.5

 

%

 

N/M(1)

 

26.5

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(2.4

)

%

 

N/M

 

 

(0.6

)

%

Current accident year non-cat loss and ALAE ratio

 

47.1

 

%

 

N/M

 

 

47.1

 

%

Total non-cat loss and ALAE ratio

 

44.7

 

%

 

N/M

 

 

46.5

 

%

Total Loss and ALAE ratio

 

71.2

 

%

 

N/M

 

 

73.0

 

%

ULAE ratio

 

6.7

 

%

 

N/M

 

 

6.7

 

%

Total Loss and LAE ratio

 

77.9

 

%

 

N/M

 

 

79.7

 

%

Expense ratio

 

33.6

 

%

 

N/M

 

 

33.6

 

%

Combined ratio

 

111.5

 

%

 

N/M

 

 

113.3

 

%

(1) N/M = Not Meaningful

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

Three months ended June 30, 2019

 

Personal &
Commercial

 

Specialty run-off

 

Total

 

 

 

 

 

 

 

Net written premiums

 

$

341.2

 

 

 

$

0.5

 

 

 

$

341.7

 

 

Net earned premiums

 

306.3

 

 

 

1.4

 

 

 

307.7

 

 

Losses and LAE incurred:

 

 

 

 

 

 

Cat loss and ALAE

 

44.2

 

 

 

3.2

 

 

 

47.4

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(14.3

)

 

 

(2.8

)

 

 

(17.1

)

 

Current accident year non-cat loss and ALAE

 

183.9

 

 

 

0.8

 

 

 

184.7

 

 

Total non-cat loss and ALAE

 

169.6

 

 

 

(2.0

)

 

 

167.6

 

 

Total Loss and ALAE

 

213.8

 

 

 

1.2

 

 

 

215.0

 

 

ULAE

 

20.9

 

 

 

(0.3

)

 

 

20.6

 

 

Total Loss and LAE

 

234.7

 

 

 

0.9

 

 

 

235.6

 

 

Underwriting expenses

 

113.9

 

 

 

(0.2

)

 

 

113.7

 

 

Net underwriting (loss) gain

 

$

(42.3

)

 

 

$

0.7

 

 

 

$

(41.6

)

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

14.4

 

%

 

N/M

 

 

15.4

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(4.7

)

%

 

N/M

 

 

(5.5

)

%

Current accident year non-cat loss and ALAE ratio

 

60.0

 

%

 

N/M

 

 

60.0

 

%

Total non-cat loss and ALAE ratio

 

55.3

 

%

 

N/M

 

 

54.5

 

%

Total Loss and ALAE ratio

 

69.7

 

%

 

N/M

 

 

69.9

 

%

ULAE ratio

 

6.8

 

%

 

N/M

 

 

6.7

 

%

Total Loss and LAE ratio

 

76.5

 

%

 

N/M

 

 

76.6

 

%

Expense ratio

 

33.4

 

%

 

N/M

 

 

33.3

 

%

Combined ratio

 

109.9

 

%

 

N/M

 

 

109.9

 

%

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

Six months ended June 30, 2020

 

Personal &
Commercial

 

Specialty run-off

 

Total

 

 

 

 

 

 

 

Net written premiums

 

$

728.3

 

 

 

$

(0.2

)

 

 

$

728.1

 

 

Net earned premiums

 

671.2

 

 

 

?

 

 

 

671.2

 

 

Losses and LAE incurred:

 

 

 

 

 

 

Cat loss and ALAE

 

132.2

 

 

 

0.1

 

 

 

132.3

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(18.6

)

 

 

6.1

 

 

 

(12.5

)

 

Current accident year non-cat loss and ALAE

 

348.0

 

 

 

0.1

 

 

 

348.1

 

 

Total non-cat loss and ALAE

 

329.4

 

 

 

6.2

 

 

 

335.6

 

 

Total Loss and ALAE

 

461.6

 

 

 

6.3

 

 

 

467.9

 

 

ULAE

 

43.3

 

 

 

?

 

 

 

43.3

 

 

Total Loss and LAE

 

504.9

 

 

 

6.3

 

 

 

511.2

 

 

Underwriting expenses

 

248.8

 

 

 

0.4

 

 

 

249.2

 

 

Net underwriting loss

 

$

(82.5

)

 

 

$

(6.7

)

 

 

$

(89.2

)

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

19.7

 

%

 

N/M

 

 

19.7

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(2.8

)

%

 

N/M

 

 

(1.9

)

%

Current accident year non-cat loss and ALAE ratio

 

51.8

 

%

 

N/M

 

 

52.0

 

%

Total non-cat loss and ALAE ratio

 

49.0

 

%

 

N/M

 

 

50.1

 

%

Total Loss and ALAE ratio

 

68.7

 

%

 

N/M

 

 

69.8

 

%

ULAE ratio

 

6.5

 

%

 

N/M

 

 

6.4

 

%

Total Loss and LAE ratio

 

75.2

 

%

 

N/M

 

 

76.2

 

%

Expense ratio

 

34.2

 

%

 

N/M

 

 

34.2

 

%

Combined ratio

 

109.4

 

%

 

N/M

 

 

110.4

 

%

 

 

 

 

 

 

 

($ in millions)

 

 

 

 

 

 

Six months ended June 30, 2019

 

Personal &
Commercial

 

Specialty run-off

 

Total

 

 

 

 

 

 

 

Net written premiums

 

$

646.8

 

 

 

$

0.9

 

 

 

$

647.7

 

 

Net earned premiums

 

604.2

 

 

 

6.2

 

 

 

610.4

 

 

Losses and LAE incurred:

 

 

 

 

 

 

Cat loss and ALAE

 

61.4

 

 

 

3.7

 

 

 

65.1

 

 

Non-cat loss and ALAE

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE

 

(36.5

)

 

 

(1.5

)

 

 

(38.0

)

 

Current accident year non-cat loss and ALAE

 

358.6

 

 

 

4.8

 

 

 

363.4

 

 

Total non-cat loss and ALAE

 

322.1

 

 

 

3.3

 

 

 

325.4

 

 

Total Loss and ALAE

 

383.5

 

 

 

7.0

 

 

 

390.5

 

 

ULAE

 

40.4

 

 

 

(0.7

)

 

 

39.7

 

 

Total Loss and LAE

 

423.9

 

 

 

6.3

 

 

 

430.2

 

 

Underwriting expenses

 

224.3

 

 

 

0.6

 

 

 

224.9

 

 

Net underwriting loss

 

$

(44.0

)

 

 

$

(0.7

)

 

 

$

(44.7

)

 

 

 

 

 

 

 

 

Cat loss and ALAE ratio

 

10.2

 

%

 

N/M

 

 

10.7

 

%

Non-cat loss and ALAE ratio

 

 

 

 

 

 

Prior accident years non-cat loss and ALAE ratio

 

(6.0

)

%

 

N/M

 

 

(6.2

)

%

Current accident year non-cat loss and ALAE ratio

 

59.3

 

%

 

N/M

 

 

59.6

 

%

Total non-cat loss and ALAE ratio

 

53.3

 

%

 

N/M

 

 

53.4

 

%

Total Loss and ALAE ratio

 

63.5

 

%

 

N/M

 

 

64.1

 

%

ULAE ratio

 

6.7

 

%

 

N/M

 

 

6.5

 

%

Total Loss and LAE ratio

 

70.2

 

%

 

N/M