Lloyd’s launches future-focused insurtech development program

This is the third cohort of the insurtech development program, which runs twice per year in 10-week increments. The first cohort launched in …

Lloyd’s has announced eleven insurtechs to participate in its Lloyd’s Lab program beginning Sept. 2.

This is the third cohort of the insurtech development program, which runs twice per year in 10-week increments. The first cohort launched in September 2018; the second one wrapped its program on July 3, 2019.

The underwriting room at Lloyd's headquarters in London.
The underwriting room at Lloyd’s headquarters in London. Lloyd’s

Recently minted CEO John Neal is focused on using digital to drive down the costs of insuring risks. Lloyd’s says it selected startups that “are focused fully on finding solutions with the potential to contribute to the ecosystem of services as part of the future at Lloyd’s vision, including ways to enhance data sharing and provide new sources of risk insight; pricing and risk models to help Lloyd’s market participants better understand threat scenarios; and ways to reduce the cost of processing claims as well as the burden of compliance and regulation.” The 11 participants are:

  • ClimaCell, which uses sensors to predict weather at a micro level
  • Digital Fineprint, which provides data to help insurers cover small businesses
  • Flock, a data platform for underwriting
  • FloodFlash, a parametric insurance program for flood
  • Hyperexponential, pricing software for specialty insurance
  • INARI, which provides automation and data storage for insurers
  • Insurdata, a platform for granular data on buildings
  • Oasis, a catastrophe modeling platform
  • Phinsys, providing finance automation tools
  • Praedicat, a data-science program
  • Tautona, a platform for claims automation

For reprint and licensing requests for this article, click here.


Related Posts:

  • No Related Posts

Lloyd’s chooses 11 insurtechs to support manifesto

Lloyds of London has welcomed 11 new teams of insurtech disruptors to join its innovation accelerator programme, the Lloyd’s Lab, and support the …

Lloyds of London has welcomed 11 new teams of insurtech disruptors to join its innovation accelerator programme, the Lloyd’s Lab, and support the Future of Lloyd’s manifesto.

The 11 teams selected were part of a competitive process involving 24 shortlisted applicants who presented their ideas to experts across the market during pitch day.

They will be focused on finding solutions that could potentially contribute to services that are part of the Future at Lloyd’s vision. This includes ways to enhance data sharing and provide new sources of risk insight.

These teams will begin working in the Lab as part of a ten-week programme that kicks off on 2 September.

It follows Lloyd’s recently committing to expanding the scope of its Lloyd’s Lab as part of its new strategy for the future. The selected teams will be aligned with this.

Best talent

Bruce Carnegie-Brown, Lloyd’s chairman, said: “Times are changing, and we are building a new vision for the Future at Lloyd’s.

“We see a huge opportunity to partner with the brightest and best talent from the technology sector to develop new ideas, new ways of working and of serving our customers.

“Nowhere is this more keenly felt than in the Lloyd’s Lab, where talent, technology and capital intersect so creatively. We want to harness this creative spirit to help us build a new Lloyd’s, which is nimbler, more customer focused, faster and more efficient than ever.”

Lloyd’s chief executive, John Neal said in June that it risks becoming irrellevant unless it grasps the tech revolution.

Most recently it delayed the launch of its platform Chorus until 2020.

The full list of teams in Lloyd’s Lab are:

  • ClimaCell: Claims to be the first microweather™ technology company, finding and forecasting weather that others can’t see. It does this using an internet-of-things approach to collect millions of weather observations, ClimaCell forecasts at the street (not city) level.
  • Digital Fineprint: An Insurtech that helps insurers and brokers improve their reach and profitability in the SME market. DFP provides data insights that can be used for risk selection, underwriting, pricing and new business generation.
  • Flock:A big data start-up that helps underwriters unlock the power of risk intelligence.
  • Floodflash:It says it enables fairly priced, no-exclusions, instant-settlement flood insurance. Customers receive a pre-agreed settlement as soon as FloodFlash sensor detect that waters have exceeded a critical depth
  • Hyperexponential: It is building practical, impactful pricing software for speciality insurance. It claims to be the first platform of its kind to be built by insurance professionals “at the coal-face of the market, for the needs of our actuaries and underwriters”.
  • INARI: An advanced ecosystem in a box that digitises insurance operations through the entire risk lifecycle. INARI says it combines “process automation, data ingestion processing, distributed ledger auditability, machine learning and data lake”.
  • Insurdata: The Insurdata platform creates high resolution, building level, peril specific exposure data globally.
  • Oasis: It provides an open source catastrophe modelling platform, free to use by anyone. It is also a community that seeks to unlock and change the world around catastrophe modelling to better understand risk in insurance and beyond.
  • Phinsys: It has built a platform of intelligent finance automation tools to deliver systematic controls to optimise financial close and reporting processes.
  • Praedicat: It reads, curates and quantifies data from science to identify emerging and emerged risks to humans / the environment. They quantify the loss to economy and liability insurers from litigation allowing risk management and product development.
  • Tautona AI: Tautona is a “cognitive automation” company that automates processes once reserved for human judgement. It says: “Our cloud based, managed service approach provides insurers with a frictionless approach to automating claims and ancillary processes.”

More than 130 applications were received from across the world for the third cohort of the Lloyd’s lab.

Related Posts:

  • No Related Posts

State Auto Financial Reports Second Quarter 2019 Results

Shares acquired on stock award exercises and vested restricted shares … Cumulative effect of change in accounting for equity securities and other …
  • Quarterly loss of $0.14 per share
  • Quarterly net loss from operations1 of $0.33 per share
  • Quarterly GAAP combined ratio of 111.4
  • Return on equity of 6.0%
  • Book value per share of $21.07

COLUMBUS, Ohio–(BUSINESS WIRE)– State Auto Financial Corporation (NASDAQ:STFC) today reported a second quarter 2019 net loss of $6.2 million, or $0.14 per diluted share, compared to net income of $6.0 million, or $0.14 per diluted share, for the same 2018 period. Net loss from operations1 per diluted share for the second quarter of 2019 was $0.33 versus $0.08 for the same 2018 period.

For the first six months of 2019, STFC had net income of $43.2 million, or $1.00 per diluted share, compared to net income of $3.9 million, or $0.09 per diluted share, for the same 2018 period. Net loss from operations1 per diluted share for the first six months of 2019 was $0.01 versus net earnings from operations1 per diluted share of $0.08 for the same 2018 period.

GAAP Operating Results

STFC’s GAAP combined ratio for the second quarter 2019 was 111.4 compared to 107.0 for the same 2018 period. Catastrophe losses during the second quarter 2019 accounted for 15.4 points of the 76.3 total loss ratio points, or $47.4 million, versus 12.2 points of the total 70.8 loss ratio points, or $37.5 million, for the same period in 2018. Non-catastrophe losses and ALAE during the second quarter 2019 included 5.5 points of favorable development relating to prior years, or $17.1 million, versus 5.9 points of favorable development, or $18.1 million, for the same period in 2018.

STFC’s GAAP combined ratio for the first six months of 2019 was 105.6 compared to 104.8 for the same 2018 period. Catastrophe losses for the first six months of 2019 accounted for 10.7 points of the 70.3 total loss ratio points, or $65.1 million, versus 7.6 points of the total 69.1 loss ratio points, or $47.3 million, for the same period in 2018. Non-catastrophe losses and ALAE for the first six months of 2019 included 6.2 points of favorable development relating to prior years, or $38.0 million, versus 5.5 points of favorable development, or $34.1 million, for the same period in 2018.

SAP Personal and Commercial Operating Results

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 tables below to enable reconciliation to total underwriting results.

Net written premium for the second quarter 2019 increased 11.6% compared to the same period in 2018. By insurance segment, net written premium for the personal and commercial segments increased 10.8% and 12.8%, respectively. The increase in the personal segment was primarily due to (i) new business growth and rate increases in homeowners and other personal, and (ii) rate increases in personal auto partially offset by lower retention. The increase in the commercial segment was led by new business growth in commercial auto and middle market commercial. The improvements were partially offset by a decrease in net written premiums in workers’ compensation due to continued intense competition in this market.

Net written premium for the first six months of 2019 increased 10.5% compared to the same period in 2018. Net written premium for the personal and commercial segments increased 11.2% and 9.4%, 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 2019 was 109.9 compared to 104.7 for the same 2018 period. Catastrophe losses during the second quarter 2019 accounted for 14.4 points of the total 76.5 loss ratio points, or $44.2 million, versus 13.4 points of the total 70.1 loss ratio points, or $37.7 million, for the same period in 2018. Non-catastrophe losses and ALAE during the second quarter 2019 included 4.7 points of favorable development relating to prior years, or $14.3 million, versus 7.2 points of favorable development, or $20.2 million, for the same period in 2018.

The SAP personal and commercial segments’ combined ratio for the first six months of 2019 was 104.9 compared to 103.0 for the same 2018 period. Catastrophe losses during the second quarter 2019 accounted for 10.2 points of the total 70.2 loss ratio points, or $61.4 million, versus 8.6 points of the total 68.3 loss ratio points, or $47.5 million, for the same period in 2018. Non-catastrophe losses and ALAE during the second quarter 2019 included 6.2 points of favorable development relating to prior years, or $38.0 million, versus 6.6 points of favorable development, or $36.5 million, for the same period in 2018.

Book Value and Return on Equity

STFC’s book value increased to $21.07 per share as of June 30, 2019, compared to $20.67 on March 31, 2019. The increase in book value was driven by increases in the market value of our investment portfolio.

Return on stockholders’ equity for the 12 months ended June 30, 2019, was 6.0% compared to (1.3)% for the 12 months ended June 30, 2018.

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

“The results for the quarter were worse than expected, but this is not unusual for the second quarter. Our greatest CAT and non-cat weather exposure comes during the second quarter, and both had significant impact. Additionally, favorable development of prior accident year’s non-cat loss and allocated loss adjustment expense reserves was less this quarter. Our year-to-date results eliminate some of this volatility, giving a clear picture of overall performance. While through six months of 2019 favorable development is down, our current accident year non-cat loss and allocated loss adjustment expense ratio continued to improve.

“Key to our continued progress is becoming a more efficient organization. As our significant investment in technology continues to deliver, our path to competitive expense ratios has become clear by means of efficient growth through our Connect platform.

“In personal lines, our largest line, personal auto, remains profitable and growing year to date. However, growth in personal auto has slowed. While some of this is due to aggressive rate reduction by our competition, we believe we can regain momentum in auto during the second half of the year. In homeowners, seasonal weather drove a poor underwriting result, while growth in the line remains strong. We’re optimistic that this line can profitably grow.

“In commercial lines, we’re beginning to see the impact of the rollout of our digital only technology and efforts to improve efficiency, leading to improvement in the expense ratio. Overall growth in the segment is strong and momentum is building.”

About State Auto Financial Corporation

State Auto Financial Corporation, headquartered in Columbus, Ohio, is a super regional property and casualty insurance holding company and is proud to be a Trusted Choice® company partner. 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.

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 $0.19 per diluted share for the second quarter of 2019 and income of $1.01 year-to-date 2019 versus income of $0.22 per diluted share for the second quarter 2018 and income of $0.01 year-to-date 2018.

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. Details behind the compilation of these results can be found in the SAP Insurance Segment Results tables of this release.

STFC has scheduled a conference call with interested investors for Thursday, August 1, at 11 a.m. ET to discuss the Company’s second quarter 2019 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 1, by calling 855-859-2056, conference ID 8499618. Supplemental schedules detailing the Company’s second quarter 2019 financial, sales and underwriting results are made available on http://www.StateAuto.com/STFC prior to the conference call.

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

2019

2018

2019

2018

Net premiums written

$

341.7

$

308.1

$

647.7

$

600.3

Earned premiums

307.7

307.5

610.4

622.4

Net investment income

21.7

21.5

41.1

41.4

Net investment gain

10.3

12.1

55.2

0.4

Other income

0.4

0.6

1.0

1.2

Total revenue

340.1

341.7

707.7

665.4

(Loss) income before federal income taxes

(7.6

)

7.7

54.0

4.4

Federal tax (benefit) expense

(1.4

)

1.7

10.8

0.5

Net (loss) income

$

(6.2

)

$

6.0

$

43.2

$

3.9

(Loss) earnings per common share:

– basic

$

(0.14

)

$

0.14

$

1.00

$

0.09

– diluted

$

(0.14

)

$

0.14

$

1.00

$

0.09

(Loss) earnings per share from operations (A):

– basic

$

(0.33

)

$

(0.08

)

$

(0.01

)

$

0.08

– diluted

$

(0.33

)

$

(0.08

)

$

(0.01

)

$

0.08

Weighted average shares outstanding:

– basic

43.4

42.8

43.3

42.7

– diluted

43.4

43.4

43.9

43.3

Return on average equity (LTM)

6.0

%

(1.3

)%

Book value per share

$

21.07

$

18.85

Dividends paid per share

$

0.10

$

0.10

$

0.20

$

0.20

Total shares outstanding

43.5

42.9

GAAP ratios:

Cat loss and ALAE ratio

15.4

12.2

10.7

7.6

Non-cat loss and LAE ratio

60.9

58.6

59.6

61.5

Loss and LAE ratio

76.3

70.8

70.3

69.1

Expense ratio

35.1

36.2

35.3

35.7

Combined ratio

111.4

107.0

105.6

104.8

(A) Reconciliation of non-GAAP financial measure:

Net (loss) income from operations:

Net (loss) income

$

(6.2

)

$

6.0

$

43.2

$

3.9

Net investment gain, net of tax

8.1

9.5

43.6

0.3

Net (loss) income from operations

$

(14.3

)

$

(3.5

)

$

(0.4

)

$

3.6

Condensed Consolidated Balance Sheets

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

(unaudited)

June 30

December 31

2019

2018

ASSETS

Fixed maturities, available-for-sale, at fair value (amortized cost $2,119.0 and $2,188.2, respectively)

$

2,157.9

$

2,159.5

Equity securities

374.9

315.0

Other invested assets

55.0

48.8

Other invested assets, at cost

6.5

5.6

Notes receivable from affiliate

70.0

70.0

Total investments

2,664.3

2,598.9

Cash and cash equivalents

44.8

59.8

Accrued investment income and other assets

30.7

32.4

Deferred policy acquisition costs

109.1

101.9

Reinsurance recoverable on losses and loss expenses payable

8.4

5.5

Prepaid reinsurance premiums

7.1

6.6

Due from affiliate

34.2

Current federal income taxes

6.3

5.9

Net deferred federal income taxes

52.1

77.8

Property and equipment, net

4.2

7.1

Total assets

$

2,961.2

$

2,895.9

LIABILITIES

Losses and loss expenses payable

$

1,135.2

$

1,146.8

Unearned premiums

621.6

584.2

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

122.0

122.0

Pension and postretirement benefits

71.5

83.0

Due to affiliate

22.4

Other liabilities

94.7

119.0

Total liabilities

2,045.0

2,077.4

STOCKHOLDERS’ EQUITY

Common stock, without par value. Authorized 100.0 shares; 50.3 and 50.0 shares issued, respectively, at stated value of $2.50 per share

125.7

125.0

Treasury stock, 6.8 and 6.8 shares, respectively, at cost

(117.5

)

(117.0

)

Additional paid-in capital

202.5

194.2

Accumulated other comprehensive loss

(41.7

)

(96.4

)

Retained earnings

747.2

712.7

Total stockholders’ equity

916.2

818.5

Total liabilities and stockholders’ equity

$

2,961.2

$

2,895.9

Condensed Consolidated Statements of Income

($ in millions, except per share amounts)

(unaudited)

Three months ended June 30

Six months ended June 30

2019

2018

2019

2018

Earned premiums

$

307.7

$

307.5

$

610.4

$

622.4

Net investment income

21.7

21.5

41.1

41.4

Net investment gain

10.3

12.1

55.2

0.4

Other income from affiliates

0.4

0.6

1.0

1.2

Total revenues

340.1

341.7

707.7

665.4

Losses and loss expenses

234.9

217.8

429.2

430.1

Acquisition and operating expenses

107.9

111.3

215.5

222.1

Interest expense

1.3

1.7

2.5

3.3

Other expenses

3.6

3.2

6.5

5.5

Total expenses

347.7

334.0

653.7

661.0

(Loss) income before federal income taxes

(7.6

)

7.7

54.0

4.4

Federal income tax (benefit) expense

Current

(0.4

)

(1.0

)

Deferred

(1.4

)

1.7

11.2

1.5

Federal income tax (benefit) expense

(1.4

)

1.7

10.8

0.5

Net (loss) income

$

(6.2

)

$

6.0

$

43.2

$

3.9

(Loss) earnings per common share:

Basic

$

(0.14

)

$

0.14

$

1.00

$

0.09

Diluted

$

(0.14

)

$

0.14

$

1.00

$

0.09

Dividends paid per common share

$

0.10

$

0.10

$

0.20

$

0.20

Consolidated Statements of Comprehensive Income

($ in millions)

(unaudited)

Three months ended June 30

Six months ended June 30

2019

2018

2019

2018

Net (loss) income

$

(6.2

)

$

6.0

$

43.2

$

3.9

Other comprehensive income (loss), net of tax:

Net unrealized holding gain (loss) on available-for-sale investments:

Unrealized holding gain (loss)

34.7

(10.2

)

69.2

(46.9

)

Reclassification adjustments for gains realized in net income

(1.5

)

(1.3

)

(1.6

)

(1.7

)

Income tax (expense) benefit

(7.0

)

2.4

(14.2

)

10.2

Total net unrealized holding gain (loss) on available- for-sale investments

26.2

(9.1

)

53.4

(38.4

)

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

2.4

3.3

4.8

6.6

Income tax expense

(0.1

)

(0.3

)

(0.3

)

(0.7

)

Total net unrecognized benefit plan obligations

0.7

1.4

1.3

2.7

Other comprehensive income (loss)

26.9

(7.7

)

54.7

(35.7

)

Comprehensive income (loss)

$

20.7

$

(1.7

)

$

97.9

$

(31.8

)

Condensed Consolidated Statement of Stockholders’ Equity

($ and shares in millions)

(unaudited)

Six months ended

Year Ended

June 30

December 31

2019

2018

Common shares:

Balance at beginning of year

50.0

49.2

Issuance of shares

0.3

0.8

Balance at period ended

50.3

50.0

Treasury shares:

Balance at beginning of year

(6.8

)

(6.8

)

Balance at period ended

(6.8

)

(6.8

)

Common stock:

Balance at beginning of year

$

125.0

$

123.0

Issuance of shares

0.7

2.0

Balance at period ended

125.7

125.0

Treasury stock:

Balance at beginning of year

$

(117.0

)

$

(116.8

)

Shares acquired on stock award exercises and vested restricted shares

(0.5

)

(0.2

)

Balance at beginning of year and period ended

(117.5

)

(117.0

)

Additional paid-in capital:

Balance at beginning of year

$

194.2

$

171.8

Issuance of common stock

3.3

13.3

Stock awards granted

5.0

9.1

Balance at period ended

202.5

194.2

Accumulated other comprehensive (loss) income:

Balance at beginning of the year

$

(96.4

)

$

3.8

Cumulative effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018

(63.9

)

Change in unrealized holding gain (loss) on investments, net of tax

53.4

(38.3

)

Change in unrecognized benefit plan obligations, net of tax

1.3

2.0

Balance at period ended

(41.7

)

(96.4

)

Retained earnings:

Balance at beginning of year

$

712.7

$

653.2

Cumulative effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018

63.9

Net income

43.2

12.8

Cash dividends paid

(8.7

)

(17.2

)

Balance at period ended

747.2

712.7

Total stockholders’ equity at period ended

$

916.2

$

818.5

Condensed Consolidated Statements of Cash Flow

($ in millions)

(unaudited)

Six months ended

June 30

2019

2018

Cash flows from operating activities:

Net income

$

43.2

$

3.9

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

Depreciation and amortization, net

3.8

4.6

Share-based compensation

4.4

4.8

Net investment (gain) loss

(55.2

)

(0.4

)

Changes in operating assets and liabilities:

Deferred policy acquisition costs

(7.2

)

5.7

Accrued investment income and other assets

1.8

(2.2

)

Postretirement and pension benefits

(11.3

)

(8.3

)

Other liabilities and due to/from affiliates, net

(79.1

)

14.5

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

(3.4

)

(2.5

)

Losses and loss expenses payable

(11.6

)

(21.1

)

Unearned premiums

37.4

(21.7

)

Deferred tax expense on share-based awards

(0.6

)

0.2

Federal income taxes

11.4

0.3

Net cash used in operating activities

(66.4

)

(22.2

)

Cash flows from investing activities:

Purchases of fixed maturities available-for-sale

(334.8

)

(207.9

)

Purchases of equity securities

(30.4

)

(78.4

)

Purchases of other invested assets

(2.6

)

(0.9

)

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

203.2

110.2

Sales of fixed maturities available-for-sale

198.7

60.9

Sales of equity securities

20.3

81.8

Sales of other invested assets

0.6

0.7

Net disposal of property and equipment

1.6

Net cash provided by (used in) investing activities

56.6

(33.6

)

Cash flows from financing activities:

Proceeds from issuance of common stock

4.0

14.3

Payments to acquire treasury stock

(0.5

)

(0.1

)

Payment of dividends

(8.7

)

(8.7

)

Payment of prepayment fee

(0.4

)

Net cash (used in) provided by financing activities

(5.2

)

5.1

Net decrease in cash and cash equivalents

(15.0

)

(50.7

)

Cash and cash equivalents at beginning of period

59.8

91.5

Cash and cash equivalents at end of period

$

44.8

$

40.8

Supplemental disclosures:

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

$

2.3

$

3.3

Net Investment Income

($ in millions)

(unaudited)

6/30/2018

9/30/2018

12/31/2018

3/31/2019

6/30/2019

Quarter to Date

Gross investment income:

Fixed maturities

$

14.9

$

15.1

$

15.0

$

15.4

$

14.7

TIPS

2.0

1.3

0.9

(0.3

)

2.6

Total fixed maturities

16.9

16.4

15.9

15.1

17.3

Equity securities

3.1

3.0

4.8

2.8

3.1

Other

1.8

1.7

2.0

1.7

1.4

Total gross investment income

21.8

21.1

22.7

19.6

21.8

Less: Investment expenses

0.3

0.3

0.2

0.1

Net investment income

$

21.5

$

20.8

$

22.7

$

19.4

$

21.7

Year to Date

Gross investment income:

Fixed maturities

$

29.9

$

45.0

$

60.0

$

15.4

$

30.1

TIPS

3.1

4.4

5.3

(0.3

)

2.3

Total fixed maturities

33.0

49.4

65.3

15.1

32.4

Equity securities

5.6

8.6

13.4

2.8

5.9

Other

3.5

5.2

7.2

1.7

3.1

Total gross investment income

42.1

63.2

85.9

19.6

41.4

Less: Investment expenses

0.7

1.0

1.0

0.2

0.3

Net investment income

$

41.4

$

62.2

$

84.9

$

19.4

$

41.1

6/30/2018

9/30/2018

12/31/2018

3/31/2019

6/30/2019

TIPS, fair value

$

156.5

$

143.8

$

142.3

$

147.0

$

145.2

TIPS, book value

$

150.6

$

140.8

$

141.2

$

140.5

$

137.4

Net Investment Gain (Loss)

($ in millions)

unaudited

Three months ended June 30

Six months ended June 30

2019

2018

2019

2018

Realized gains on sales of securities:

Fixed maturities

$

1.5

$

1.3

$

1.6

$

1.7

Equity securities

1.2

1.7

1.5

5.0

Other invested assets

0.1

Total realized gains

2.7

3.0

3.1

6.8

Realized losses on sales of securities:

Sales of equity securities

(0.4

)

(2.2

)

(0.6

)

Total realized losses

(0.4

)

(2.2

)

(0.6

)

Net realized gain on investments

$

2.7

$

2.6

$

0.9

$

6.2

Net unrealized gain (loss) on investments(1):

Equity securities

6.4

10.9

50.5

(3.7

)

Other invested assets

1.2

(1.4

)

5.1

(2.1

)

Net unrealized gain (loss) on investments

7.6

9.5

55.6

(5.8

)

Other net realized loss

$

$

$

(1.3

)

$

Net investment gain

$

10.3

$

12.1

$

55.2

$

0.4

(1)

Unrealized holding gains (losses) recognized during the period on securities held at the reporting date

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

2019

2018

Deferred tax assets:

Unearned premiums not currently deductible

$

25.8

$

24.3

Losses and loss expenses payable discounting

11.5

19.9

Postretirement and pension benefits

19.6

21.4

Net unrealized holding losses on investments

6.2

Realized loss on other-than-temporary impairment

2.0

1.9

Other liabilities

12.5

14.8

Net operating loss carryforward

19.6

15.1

Tax credit carryforwards

2.3

2.7

Other

1.6

Total deferred tax assets

94.3

107.9

Deferred tax liabilities:

Deferral of policy acquisition costs

22.9

21.4

Net unrealized holding gains on investments

19.2

Losses and loss expenses payable discounting (transition rule)

8.7

Other

0.1

Total deferred tax liabilities

42.2

30.1

Net deferred federal income taxes

$

52.1

$

77.8

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

Three months ended June 30

Six months ended June 30

2019

2018

2019

2018

(Loss) income before federal income taxes

$

(7.6

)

$

7.7

$

54.0

$

4.4

Federal income tax (benefit) expense:

Current

(0.4

)

(1.0

)

Deferred

(1.4

)

1.7

11.2

1.5

Total federal income tax (benefit) expense

(1.4

)

1.7

10.8

0.5

Net (loss) income

$

(6.2

)

$

6.0

$

43.2

$

3.9

SAP Personal Insurance Segment Results

(unaudited)

($ 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)

Three months ended June 30, 2018

Personal Auto

Homeowners

Other Personal

Total

Net written premiums

$

106.2

$

72.1

$

6.6

$

184.9

Net earned premiums

99.1

60.4

5.4

164.9

Losses and LAE incurred:

Cat loss and ALAE

3.8

22.3

1.0

27.1

Non-cat loss and ALAE

Prior accident years non-cat loss and ALAE

(7.2

)

(2.9

)

(0.5

)

(10.6

)

Current accident year non-cat loss and ALAE

64.8

25.9

3.6

94.3

Total non-cat loss and ALAE

57.6

23.0

3.1

83.7

Total Loss and ALAE

61.4

45.3

4.1

110.8

ULAE

5.9

4.6

0.2

10.7

Total Loss and LAE

67.3

49.9

4.3

121.5

Underwriting expenses

31.4

22.8

2.4

56.6

Net underwriting gain (loss)

$

0.4

$

(12.3

)

$

(1.3

)

$

(13.2

)

Cat loss and ALAE ratio

3.9

%

36.9

%

18.2

%

16.4

%

Non-cat loss and ALAE ratio

Prior accident years non-cat loss and ALAE ratio

(7.2

)%

(4.8

)%

(9.8

)%

(6.4

)%

Current accident year non-cat loss and ALAE ratio

65.3

%

43.0

%

65.6

%

57.2

%

Total non-cat loss and ALAE ratio

58.1

%

38.2

%

55.8

%

50.8

%

Total Loss and ALAE ratio

62.0

%

75.1

%

74.0

%

67.2

%

ULAE ratio

6.0

%

7.6

%

5.2

%

6.5

%

Total Loss and LAE ratio

68.0

%

82.7

%

79.2

%

73.7

%

Expense ratio

29.5

%

31.5

%

36.1

%

30.6

%

Combined ratio

97.5

%

114.2

%

115.3

%

104.3

%

($ 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

%

($ in millions)

Six months ended June 30, 2018

Personal Auto

Homeowners

Other Personal

Total

Net written premiums

$

208.1

$

126.4

$

12.1

$

346.6

Net earned premiums

192.6

118.3

10.3

321.2

Losses and LAE incurred:

Cat loss and ALAE

3.9

27.0

1.4

32.3

Non-cat loss and ALAE

Prior accident years non-cat loss and ALAE

(11.2

)

(5.7

)

(0.3

)

(17.2

)

Current accident year non-cat loss and ALAE

131.7

54.3

5.6

191.6

Total non-cat loss and ALAE

120.5

48.6

5.3

174.4

Total Loss and ALAE

124.4

75.6

6.7

206.7

ULAE

10.9

8.6

0.5

20.0

Total Loss and LAE

135.3

84.2

7.2

226.7

Underwriting expenses

60.3

41.0

4.7

106.0

Net underwriting loss

$

(3.0

)

$

(6.9

)

$

(1.6

)

$

(11.5

)

Cat loss and ALAE ratio

2.1

%

22.8

%

13.3

%

10.1

%

Non-cat loss and ALAE ratio

Prior accident years non-cat loss and ALAE ratio

(5.8

)%

(4.8

)%

(2.9

)%

(5.4

)%

Current accident year non-cat loss and ALAE ratio

68.3

%

45.9

%

53.9

%

59.7

%

Total non-cat loss and ALAE ratio

62.5

%

41.1

%

51.0

%

54.3

%

Total Loss and ALAE ratio

64.6

%

63.9

%

64.3

%

64.4

%

ULAE ratio

5.6

%

7.3

%

5.3

%

6.2

%

Total Loss and LAE ratio

70.2

%

71.2

%

69.6

%

70.6

%

Expense ratio

29.0

%

32.4

%

39.0

%

30.6

%

Combined ratio

99.2

%

103.6

%

108.6

%

101.2

%

SAP Commercial Insurance Segment Results

(unaudited)

($ 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)

Three months ended June 30, 2018

Commercial

Auto

Small

Commercial

Package

Middle

Market

Commercial

Workers’

Comp

Farm &

Ranch

Other

Commercial

Total

Net written premiums

$

21.4

$

31.6

$

32.8

$

17.6

$

12.7

$

4.7

$

120.8

Net earned premiums

18.7

30.3

28.7

22.6

11.1

4.2

115.6

Losses and LAE incurred:

Cat loss and ALAE

0.6

4.5

3.8

1.7

10.6

Non-cat loss and ALAE

Prior accident years non-cat loss and ALAE

(1.1

)

(4.2

)

1.7

(3.6

)

(1.5

)

(0.9

)

(9.6

)

Current accident year non-cat loss and ALAE

11.0

18.6

15.7

13.9

6.4

1.7

67.3

Total non-cat loss and ALAE

9.9

14.4

17.4

10.3

4.9

0.8

57.7

Total Loss and ALAE

10.5

18.9

21.2

10.3

6.6

0.8

68.3

ULAE

1.1

1.7

1.5

1.5

0.7

0.3

6.8

Total Loss and LAE

11.6

20.6

22.7

11.8

7.3

1.1

75.1

Underwriting expenses

9.5

13.9

12.3

6.4

5.4

1.8

49.3

Net underwriting (loss) gain

$

(2.4

)

$

(4.2

)

$

(6.3

)

$

4.4

$

(1.6

)

$

1.3

$

(8.8

)

Cat loss and ALAE ratio

2.9

%

14.8

%

13.3

%

%

14.8

%

%

9.1

%

Non-cat loss and ALAE ratio

Prior accident years non-cat loss and ALAE ratio

(5.7

)%

(14.0

)%

6.2

%

(15.9

)%

(13.8

)%

(21.0

)%

(8.3

)%

Current accident year non-cat loss and ALAE ratio

59.4

%

61.8

%

54.2

%

61.2

%

58.0

%

38.2

%

58.2

%

Total non-cat loss and ALAE ratio

53.7

%

47.8

%

60.4

%

45.3

%

44.2

%

17.2

%

49.9

%

Total Loss and ALAE ratio

56.6

%

62.6

%

73.7

%

45.3

%

59.0

%

17.2

%

59.0

%

ULAE ratio

5.9

%

5.7

%

5.4

%

7.2

%

6.3

%

6.1

%

6.0

%

Total Loss and LAE ratio

62.5

%

68.3

%

79.1

%

52.5

%

65.3

%

23.3

%

65.0

%

Expense ratio

44.0

%

43.9

%

37.5

%

36.1

%

42.4

%

40.2

%

40.7

%

Combined ratio

106.5

%

112.2

%

116.6

%

88.6

%

107.7

%

63.5

%

105.7

%

($ 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

%

($ in millions)

Six months ended June 30, 2018

Commercial

Auto

Small

Commercial

Package

Middle

Market

Commercial

Workers’

Comp

Farm &

Ranch

Other

Commercial

Total

Net written premiums

$

40.0

$

62.0

$

61.9

$

42.0

$

24.2

$

8.8

$

238.9

Net earned premiums

37.1

60.7

57.3

45.4

22.1

7.9

230.5

Losses and LAE incurred:

Cat loss and ALAE

0.6

7.7

5.3

1.6

15.2

Non-cat loss and ALAE

Prior accident years non-cat loss and ALAE

(4.6

)

(4.7

)

(0.8

)

(5.9

)

(1.2

)

(2.1

)

(19.3

)

Current accident year non-cat loss and ALAE

23.4

36.8

37.2

29.0

10.6

3.7

140.7

Total non-cat loss and ALAE

18.8

32.1

36.4

23.1

9.4

1.6

121.4

Total Loss and ALAE

19.4

39.8

41.7

23.1

11.0

1.6

136.6

ULAE

2.3

3.0

3.0

3.8

1.0

0.6

13.7

Total Loss and LAE

21.7

42.8

44.7

26.9

12.0

2.2

150.3

Underwriting expenses

17.6

27.7

23.6

14.4

10.2

3.8

97.3

Net underwriting (loss) gain

$

(2.2

)

$

(9.8

)

$

(11.0

)

$

4.1

$

(0.1

)

$

1.9

$

(17.1

)

Cat loss and ALAE ratio

1.5

%

12.7

%

9.2

%

%

7.2

%

%

6.6

%

Non-cat loss and ALAE ratio

Prior accident years non-cat loss and ALAE ratio

(12.3

)%

(7.8

)%

(1.3

)%

(12.9

)%

(5.5

)%

(27.1

)%

(8.4

)%

Current accident year non-cat loss and ALAE ratio

63.3

%

60.6

%

64.9

%

63.6

%

47.7

%

46.5

%

61.0

%

Total non-cat loss and ALAE ratio

51.0

%

52.8

%

63.6

%

50.7

%

42.2

%

19.4

%

52.6

%

Total Loss and ALAE ratio

52.5

%

65.5

%

72.8

%

50.7

%

49.4

%

19.4

%

59.2

%

ULAE ratio

6.1

%

5.0

%

5.3

%

8.6

%

4.8

%

6.9

%

6.0

%

Total Loss and LAE ratio

58.6

%

70.5

%

78.1

%

59.3

%

54.2

%

26.3

%

65.2

%

Expense ratio

43.9

%

44.7

%

38.2

%

34.3

%

42.1

%

43.5

%

40.7

%

Combined ratio

102.5

%

115.2

%

116.3

%

93.6

%

96.3

%

69.8

%

105.9

%

SAP Insurance Segment Results

(unaudited)

($ 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(1)

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

%

(1) N/M = Not Meaningful

($ in millions)

Three months ended June 30, 2018

Personal &

Commercial

Specialty run-off

Total

Net written premiums

$

305.7

$

2.4

$

308.1

Net earned premiums

280.5

27.0

307.5

Losses and LAE incurred:

Cat loss and ALAE

37.7

(0.2

)

37.5

Non-cat loss and ALAE

Prior accident years non-cat loss and ALAE

(20.2

)

2.1

(18.1

)

Current accident year non-cat loss and ALAE

161.6

18.0

179.6

Total non-cat loss and ALAE

141.4

20.1

161.5

Total Loss and ALAE

179.1

19.9

199.0

ULAE

17.5

1.5

19.0

Total Loss and LAE

196.6

21.4

218.0

Underwriting expenses

105.9

4.6

110.5

Net underwriting (loss) gain

$

(22.0

)

$

1.0

$

(21.0

)

Cat loss and ALAE ratio

13.4

%

(0.7

)%

12.2

%

Non-cat loss and ALAE ratio

Prior accident years non-cat loss and ALAE ratio

(7.2

)%

7.8

%

(5.9

)%

Current accident year non-cat loss and ALAE ratio

57.6

%

66.4

%

58.3

%

Total non-cat loss and ALAE ratio

50.4

%

74.2

%

52.4

%

Total Loss and ALAE ratio

63.8

%

73.5

%

64.6

%

ULAE ratio

6.3

%

5.6

%

6.3

%

Total Loss and LAE ratio

70.1

%

79.1

%

70.9

%

Expense ratio

34.6

%

192.2

%

35.8

%

Combined ratio

104.7

%

271.3

%

106.7

%

($ 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

70.6

%

Expense ratio

34.7

%

N/M

34.7

%

Combined ratio

104.9

%

N/M

105.3

%

($ in millions)

Six months ended June 30, 2018

Personal &

Commercial

Specialty run-off

Total

Net written premiums

$

585.5

$

14.8

$

600.3

Net earned premiums

551.7

70.7

622.4

Losses and LAE incurred:

Cat loss and ALAE

47.5

(0.2

)

47.3

Non-cat loss and ALAE

Prior accident years non-cat loss and ALAE

(36.5

)

2.4

(34.1

)

Current accident year non-cat loss and ALAE

332.3

48.0

380.3

Total non-cat loss and ALAE

295.8

50.4

346.2

Total Loss and ALAE

343.3

50.2

393.5

ULAE

33.7

3.7

37.4

Total Loss and LAE

377.0

53.9

430.9

Underwriting expenses

203.3

14.2

217.5

Net underwriting (loss) gain

$

(28.6

)

$

2.6

$

(26.0

)

Cat loss and ALAE ratio

8.6

%

(0.3

)%

7.6

%

Non-cat loss and ALAE ratio

Prior accident years non-cat loss and ALAE ratio

(6.6

)%

3.4

%

(5.5

)%

Current accident year non-cat loss and ALAE ratio

60.2

%

67.8

%

61.1

%

Total non-cat loss and ALAE ratio

53.6

%

71.2

%

55.6

%

Total Loss and ALAE ratio

62.2

%

70.9

%

63.2

%

ULAE ratio

6.1

%

5.2

%

6.0

%

Total Loss and LAE ratio

68.3

%

76.1

%

69.2

%

Expense ratio

34.7

%

96.2

%

36.2

%

Combined ratio

103.0

%

172.3

%

105.4

%

The following table provides a reconciliation of our statutory underwriting results to GAAP consolidated income before federal income taxes for the three and six months ended June 30, 2019 and 2018:

($ millions)

2Q 2019

2Q 2018

YTD 2019

YTD 2018

Segment (loss) income before federal income taxes:

Insurance operations:

Personal insurance SAP underwriting loss

$

(29.9

)

$

(13.2

)

$

(25.7

)

$

(11.5

)

Commercial insurance SAP underwriting loss

(12.4

)

(8.8

)

(18.3

)

(17.1

)

Specialty run-off

0.7

1.0

(0.7

)

2.6

Total insurance operations

(41.6

)

(21.0

)

(44.7

)

(26.0

)

Investment operations:

Net investment income

21.7

21.5

41.1

41.4

Net investment gain

10.3

12.1

55.2

0.4

Total investment operations

32.0

33.6

96.3

41.8

All other segments income

0.1

0.1

0.2

0.2

Reconciling items:

GAAP adjustments

6.1

0.6

10.1

(3.4

)

Interest expense on corporate debt

(1.3

)

(1.7

)

(2.5

)

(3.3

)

Corporate expenses

(2.9

)

(3.9

)

(5.4

)

(4.9

)

Total reconciling items

1.9

(5.0

)

2.2

(11.6

)

Total consolidated (loss) income before federal income taxes

$

(7.6

)

$

7.7

$

54.0

$

4.4

View source version on businesswire.com: https://www.businesswire.com/news/home/20190801005212/en/

State Auto Financial Corporation
Media contact:

Kyle Anderson, 614-917-5497

[email protected]

Investor contact:

Natalie Schoolcraft, 614-917-4341

[email protected]

Source: State Auto Financial Corporation

Related Posts:

  • No Related Posts

Insurtech startup Hippo Insurance secures $100 million in Series D funding round to fuel …

Hippo, an insurtech that’s transforming the home insurance market with a simpler process and smarter coverage, has raised $100 million Series D …

Hippo, an insurtech that’s transforming the home insurance market with a simpler process and smarter coverage, has raised $100 million Series D funding round to fuel the expansion of Hippo’s geographic footprint to more than 80 percent of the U.S. homeowner population by the end of the year. The round was led by Bond, the global technology investment firm founded by Mary Meeker, Mood Rowghani, Noah Knauf and Juliet de Baubigny. This fresh capital infusion brings total funding raise to date to $209 million. In conjunction with the funding, Hippo also announced that Mr. Knauf will join its Board of Directors.

Founded in 2015 by Assaf Wand and Eyal Navon, the San Francisco, California-based Hippo offers intuitive and proactive home insurance by taking a smarter, tech-driven approach. Since its launch in 2017, Hippo’s modern take on home insurance, from coverage and pricing to claims and service, has evolved into a new kind of insurance that proactively identifies and resolves ongoing risks for today’s consumers. Its latest investment round builds on a record twelve months for Hippo, which has seen premiums grow more than 10 times and places them among the fastest growing companies in the Insurance Technology sector.

We launched Hippo to transform the outdated and often frustrating relationship people have with their home insurance provider into one that’s approachable, modern, and always adding value,” said Assaf Wand, co-founder and CEO of Hippo. “Not only are more than 60% of US homeowners underinsured but traditional insurance only interacts with you when you file a claim. We’re providing more comprehensive policies and helping customers prevent claims from ever happening through protective services, programs and alerts that safeguard their homes, a family’s largest personal asset.”

Hippo is building faster, more accurate and more affordable homeowners insurance for today’s customers. The company’s data-driven pricing and real-time underwriting analyzes trusted public data sets, from municipal building records to satellite imagery of physical property characteristics, to develop a more accurate profile of a customer’s property, resulting in qualified customers receiving a comprehensive, tailored and accurate quote in under 60 seconds, and reduced premium costs of up to 25 percent.

Hippo also provides customers with complimentary smart home devices, to protect homeowners against water leaks, fire damage and break-ins. These devices have been well-received by clients, with more than 70% installation rate to date. Hippo’s customer-centric and preventative approach have earned an average Net Promoter Score of 76, nearly three times the industry average.

“Hippo has emerged as one of the highest growth companies we’ve seen among its insurance peers and more broadly in FinTech,” said Noah Knauf, General Partner at Bond. “The Hippo team is world-class and we’re excited to partner with them as they build the next generation insurance company.”


Related Posts:

  • No Related Posts

PwC announces 2019 InsurTech cohort

The PwC Insurtech team has revealed the eight newest insurtech firms to have completed the Scale | InsurTech ’19 programme, which focuses on …

The PwC Insurtech team has revealed the eight newest insurtech firms to have completed the Scale | InsurTech ‘19 programme, which focuses on building commercial value for both scale-ups and incumbents in the insurance industry

The Scale | InsurTech ‘19 programme ran for 11 weeks with support from the UK PwC insurtech team. As well as supporting the cohort to identify commercial opportunities with potential clients, the programme enabled the firms to refine their business model and value propositions, raise their profile within the insurance industry and prepare their business for growth internationally.

Participants undertook a business development curriculum which provided valuable insight into areas such as sales and marketing, leadership and culture, as well as how to approach fundraising.

The eight firms that make up the Scale | Insurtech 2019 cohort are:

  1. Artesian Risk & Compliance Hub, a service that lets companies automate risk assessment faster and more accurately through the use of structured and unstructured data sources to allow automation of underwriting policy.
  2. Artificial, which helps insurers, brokers and MGAs with the distribution, pricing and negotiation of risk. From the digitising of processes to the application of machine learning, their platform is structured around four core products: Build, Distribute, Price and Manage.
  3. Atidot, which provides a cloud-based platform giving life insurers data-driven insights to inform decision making and develop new business strategies. They allow insurers to take control of existing data to improve understanding of customers’ behaviour and create viability into their risk.
  4. Data-XL, which wants to make pricing changes stick by helping insurance companies manage their price variable through following the model of retail companies. It has developed two plug-and-play solutions: Price Optimisation and Supplier Overcharge Detection.
  5. Innovative Applications, a tech incubator that produces AI software which sits at the heart of companies. It has developed ML algorithms and built a protection platform consisting of three pillars specifically designed under the concept of human behaviour.
  6. Phinsys, which has built a platform of intelligent finance automation tools to deliver systematic controls to optimise the financial close and reporting process. It specialises in providing innovative solutions to support insurers’ processes around financial accounting, reg reporting and analytical requirements.
  7. REG, a pioneer in developing RegTech solutions. The REG Network (3,200 members) addresses issues around legal, regulatory and statutory counterparty risk processes by automating the management of oversight, due diligence and compliance assessments backed by 24/7 support.
  8. Squirro, a self-learning AI platform keeping insurers in the know and recommending what steps to take next. Ready-made applications help with deal origination, customer relationship management and more efficient underwriting. This allows an increase in efficiency and output.

“The scale-up programme provided the tools, knowledge and networks to help these firms scale successfully, and throughout the programme, commercial relationships were forged and opportunities created for both the new businesses and incumbents,” said Glynn Austen-Brown, PwC’s Global Insurtech Lead. “We are excited to follow our cohort and work with them in the future to continue to drive transformation within the insurance industry.”

Related Posts:

  • No Related Posts