State Auto reports drop in 2Q profit

Wind and hail storms in Texas and Colorado put a dent in State Auto Financial’s second-quarter results, which were announced Monday.

The insurer reported a profit of $6 million, or 8 cents per share, for the April 1-June 30 quarter, down from $8.7 million, or 21 cents per share, for the 2017 second quarter.

The company recorded catastrophic losses of $37.5 million for the most recent period, much of it tied to those storms during the quarter.

The smaller profit came even as the insurer said improvements in its auto and homeowner business are starting to show up in its quarterly results. It also noted that its move to an all-digital format is working well. That requires new auto and homeowner customers and the independent agents who sell State Auto policies to conduct business online.

After years of poor performance, State Auto’s auto business was profitable through the first half of 2018 even as it has been hit with higher claims tied to distracted driving. The homeowner business has been profitable for the past year.

“Our journey to profitable growth took another significant step forward this quarter, and I could not be more proud,” Mike LaRocco, the company’s chairman, president and CEO, told analysts on a conference call.

“All the hard work to turn around State Auto — our new culture, becoming a true digital-only carrier, building new, sophisticated products, reducing loss and underwriting leakage and returning to our core strengths as a personal and commercial lines carrier — are paying off.”

Revenue for the quarter totaled $341.7 million in the period, a drop of 4 percent from the 2017 second quarter.

State Auto shares closed at $31.09, up 21 cents or 0.7 percent.