State Auto Kept in Neutral

Headquartered in Columbus, Ohio, State Auto Financial Corporation (STFC - Snapshot Report) is a property & casualty insurance holding company formed in June 1991 by State Automobile Mutual Insurance Company (Mutual), an Ohio mutual P&C company. Founded in 1921, Mutual currently owns approximately two-thirds of STFC.

STFC is expected to release its 3Q08 results on October 23, 2008. The company reported operating losses of $0.12 per share in 2Q08, versus operating net income of $0.51 per share in the prior year quarter, driven by a record level of catastrophe losses of $76.8 million.

Nevertheless, the company is progressing, with net written premiums reporting an increase of 12.4% year-over-year. Standard Auto, the largest line of business, is also growing with good levels of new business applications and steady retentions.

While pricing technology, product development, agency automation and business support have aided the organic growth of the company, growth trends continue to be under attack from intensifying competition, in addition to upward pressure on the company's loss ratios. Therefore, our Hold rating remains in place.

Read the full analyst report on STFC