10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2019

or

☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                     

Commission File Number 000-19289

STATE AUTO FINANCIAL CORPORATION

(Exact name of Registrant as specified in its charter)

Ohio			31-1324304
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
518 East Broad Street	Columbus	Ohio	43215-3976
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (614) 464-5000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common shares, without par value	STFC	The NASDAQ Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  ý    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	x
Non-accelerated filer	☐	Smaller reporting company	☐
(Do not check if a smaller reporting company)		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  ☐    No   ý

On October 25, 2019, the Registrant had 43,563,019 Common Shares outstanding.

Index to Form 10-Q Quarterly Report for the three and nine month periods ended September 30, 2019

	Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed consolidated balance sheets – September 30, 2019 and December 31, 2018	1
	Condensed consolidated statements of income – Three months ended September 30, 2019 and 2018	2
	Condensed consolidated statements of income – Nine months ended September 30, 2019 and 2018	3
	Condensed consolidated statements of comprehensive income – Three months ended September 30, 2019 and 2018	4
	Condensed consolidated statements of comprehensive income – Nine months ended September 30, 2019 and 2018	5
	Condensed consolidated statements of stockholders’ equity - Three months ended September 30, 2019 and 2018	6
	Condensed consolidated statements of stockholders’ equity - Nine months ended September 30, 2019 and 2018	7
	Condensed consolidated statements of cash flows – Nine months ended September 30, 2019 and 2018	8
	Notes to condensed consolidated financial statements – September 30, 2019	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4.	Controls and Procedures	53
	Part II. Other Information
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 4.	Mine Safety Disclosures	54
Item 5.	Other Information	54
Item 6.	Exhibits	55
	Signatures	56

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

PART I – FINANCIAL STATEMENTS

Item 1. Condensed Consolidated Balance Sheets

($ and shares in millions, except per share amounts)	September 30, 2019			December 31, 2018
(unaudited)
Assets
Fixed maturities, available-for-sale, at fair value (amortized cost $2,129.0 and $2,188.2, respectively)	$	2,189.3		$	2,159.5
Equity securities	373.3			315.0
Other invested assets	64.6			48.8
Other invested assets, at cost	6.5			5.6
Notes receivable from affiliate	70.0			70.0
Total investments	2,703.7			2,598.9
Cash and cash equivalents	38.3			59.8
Accrued investment income and other assets	34.7			32.4
Deferred policy acquisition costs (affiliated net assumed $53.0 and $48.3, respectively)	114.3			101.9
Reinsurance recoverable on losses and loss expenses payable	7.2			5.5
Prepaid reinsurance premiums	7.5			6.6
Due from affiliate	17.4			—
Current federal income taxes	6.3			5.9
Net deferred federal income taxes	46.2			77.8
Property and equipment, at cost	4.2			7.1
Total assets	$	2,979.8		$	2,895.9
Liabilities and Stockholders’ Equity
Losses and loss expenses payable (affiliated net assumed $521.5 and $593.6, respectively)	$	1,092.7		$	1,146.8
Unearned premiums (affiliated net assumed $111.7 and $112.4, respectively)	649.2			584.2
Notes payable (affiliates $15.2 and $15.2, respectively)	122.0			122.0
Pension and postretirement benefits	70.3			83.0
Due to affiliate	—			22.4
Other liabilities (affiliated net assumed $13.1 and $19.9, respectively)	101.9			119.0
Total liabilities	2,036.1			2,077.4
Stockholders’ equity:
Class A Preferred stock (nonvoting), without par value. Authorized 2.5 shares; none issued	—			—
Class B Preferred stock, without par value. Authorized 2.5 shares; none issued	—			—
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	125.8			125.0
Treasury stock, 6.8 and 6.8 shares, respectively, at cost	(117.5		)	(117.0		)
Additional paid-in capital	205.2			194.2
Accumulated other comprehensive loss	(24.2		)	(96.4		)
Retained earnings	754.4			712.7
Total stockholders’ equity	943.7			818.5
Total liabilities and stockholders’ equity	$	2,979.8		$	2,895.9

See accompanying notes to condensed consolidated financial statements.

1

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Condensed Consolidated Statements of Income

($ in millions, except per share amounts)	Three months ended September 30
(unaudited)	2019			2018
Earned premiums (affiliated net assumed $55.7 and $71.9, respectively)	$	319.6		$	306.8
Net investment income (affiliates $0.7 and $1.3, respectively)	19.3			20.8
Net investment (loss) gain	(5.0		)	17.8
Other income from affiliates	0.6			0.6
Total revenues	334.5			346.0
Losses and loss expenses (affiliated net assumed $24.2 and $43.0, respectively)	208.4			191.0
Acquisition and operating expenses (affiliated net assumed $17.6 and affiliated net ceded $26.8, respectively)	109.7			110.9
Interest expense (affiliates $0.2 and $0.2, respectively)	1.2			1.2
Other expenses	2.5			1.9
Total expenses	321.8			305.0
Income before federal income taxes	12.7			41.0
Federal income tax expense (benefit):
Current	—			(0.1		)
Deferred	1.2			7.7
Total federal income tax expense	1.2			7.6
Net income	$	11.5		$	33.4
Earnings per common share:
Basic	$	0.26		$	0.78
Diluted	$	0.25		$	0.76
Dividends paid per common share	$	0.10		$	0.10

See accompanying notes to condensed consolidated financial statements.

2

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Condensed Consolidated Statements of Income

($ in millions, except per share amounts)	Nine months ended September 30
(unaudited)	2019			2018
Earned premiums (affiliated net assumed $168.5 and $251.1, respectively)	$	930.0		$	929.2
Net investment income (affiliates $2.3 and $3.7, respectively)	60.4			62.2
Net investment gain	50.2			18.2
Other income from affiliates	1.6			1.8
Total revenues	1,042.2			1,011.4
Losses and loss expenses (affiliated net assumed $125.1 and $136.3, respectively)	637.6			621.1
Acquisition and operating expenses (affiliated net assumed $54.5 and $52.3, respectively)	325.2			333.0
Interest expense (affiliates $0.7 and $0.7, respectively)	3.7			4.5
Other expenses	9.0			7.4
Total expenses	975.5			966.0
Income before federal income taxes	66.7			45.4
Federal income tax (benefit) expense:
Current	(0.4		)	(1.1		)
Deferred	12.4			9.2
Total federal income tax expense	12.0			8.1
Net income	$	54.7		$	37.3
Earnings per common share:
Basic	$	1.26		$	0.87
Diluted	$	1.25		$	0.86
Dividends paid per common share	$	0.30		$	0.30

See accompanying notes to condensed consolidated financial statements.

3

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Consolidated Statements of Comprehensive Income

($ in millions, except per share amounts)	Three months ended September 30
(unaudited)	2019			2018
Net income	$	11.5		$	33.4
Other comprehensive income (loss), net of tax:
Net unrealized holding gain (loss) on fixed available-for-sale investments:
Unrealized holding gain (loss)	22.6			(14.7		)
Reclassification adjustments for gains realized in net income	(1.2		)	—
Income tax (expense) benefit	(4.5		)	3.1
Total net unrealized holding gain (loss) on available-for-sale investments	16.9			(11.6		)
Net unrecognized benefit plan obligations:
Reclassification adjustments for amortization to statements of income:
Negative prior service cost	(1.6		)	(1.6		)
Net actuarial loss	2.4			3.3
Income tax expense	(0.2		)	(0.4		)
Total net unrecognized benefit plan obligations	0.6			1.3
Other comprehensive income (loss)	17.5			(10.3		)
Comprehensive income	$	29.0		$	23.1

See accompanying notes to condensed consolidated financial statements.

4

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Consolidated Statements of Comprehensive Income (Loss)

($ in millions, except per share amounts)	Nine months ended September 30
(unaudited)	2019			2018
Net income	$	54.7		$	37.3
Other comprehensive income (loss), net of tax:
Net unrealized holding gain (loss) on fixed available-for-sale investments:
Unrealized holding gain (loss)	91.8			(61.6		)
Reclassification adjustments for gains realized in net income	(2.8		)	(1.7		)
Income tax (expense) benefit	(18.7		)	13.3
Total net unrealized holding gain (loss) on available-for-sale investments	70.3			(50.0		)
Net unrecognized benefit plan obligations:
Reclassification adjustments for amortization to statements of income:
Negative prior service cost	(4.8		)	(4.8		)
Net actuarial loss	7.2			9.9
Income tax expense	(0.5		)	(1.1		)
Total net unrecognized benefit plan obligations	1.9			4.0
Other comprehensive income (loss)	72.2			(46.0		)
Comprehensive income (loss)	$	126.9		$	(8.7	)

See accompanying notes to condensed consolidated financial statements.

5

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Condensed Consolidated Statements of Stockholders’ Equity

(in millions)	Three months ended September 30
	2019			2018
Common shares:
Balance at beginning of period	50.3			49.7
Issuance of shares	—			0.1
Balance at September 30	50.3			49.8
Treasury shares:
Balance at beginning of period	(6.8		)	(6.8		)
Balance at September 30	(6.8		)	(6.8		)
Common stock:
Balance at beginning of period	$	125.7		$	124.1
Issuance of shares	0.1			0.4
Balance at September 30	$	125.8		$	124.5
Treasury stock:
Balance at beginning of period	$	(117.5	)	$	(116.9	)
Shares acquired on stock award exercises and vested restricted shares	—			(0.1		)
Balance at September 30	$	(117.5	)	$	(117.0	)
Additional paid-in capital:
Balance at beginning of period	$	202.5		$	184.8
Issuance of common stock	0.7			2.0
Stock awards granted	2.0			1.8
Balance at September 30	$	205.2		$	188.6
Accumulated other comprehensive loss:
Balance at beginning of period	$	(41.7	)	$	(95.8	)
Change in unrealized holding gain (loss) on investments, net of tax	16.9			(11.6		)
Change in unrecognized benefit plan obligations, net of tax	0.6			1.3
Balance at September 30	$	(24.2	)	$	(106.1	)
Retained earnings:
Balance at beginning of period	$	747.2		$	712.3
Net income	11.5			33.4
Dividends declared (affiliates $2.6 and $2.6, respectively)	$	(4.3	)	$	(4.1	)
Balance at September 30	754.4			741.6
Total stockholders’ equity at September 30	$	943.7		$	831.6

See accompanying notes to condensed consolidated financial statements.

6

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Condensed Consolidated Statements of Stockholders’ Equity

(in millions)	Nine months ended September 30
	2019			2018
Common shares:
Balance at beginning of year	50.0			49.2
Issuance of shares	0.3			0.6
Balance at September 30	50.3			49.8
Treasury shares:
Balance at beginning of year	(6.8		)	(6.8		)
Balance at September 30	(6.8		)	(6.8		)
Common stock:
Balance at beginning of year	$	125.0		$	123.0
Issuance of shares	0.8			1.5
Balance at September 30	$	125.8		$	124.5
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 September 30	$	(117.5	)	$	(117.0	)
Additional paid-in capital:
Balance at beginning of year	$	194.2		$	171.8
Issuance of common stock	4.0			10.1
Stock awards granted	7.0			6.7
Balance at September 30	$	205.2		$	188.6
Accumulated other comprehensive (loss) income:
Balance at beginning of 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	70.3			(50.0		)
Change in unrecognized benefit plan obligations, net of tax	1.9			4.0
Balance at September 30	$	(24.2	)	$	(106.1	)
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	54.7			37.3
Dividends declared (affiliates $7.8 and $7.8, respectively)	$	(13.0	)	$	(12.8	)
Balance at September 30	754.4			741.6
Total stockholders’ equity at September 30	$	943.7		$	831.6

See accompanying notes to condensed consolidated financial statements.

7

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Condensed Consolidated Statements of Cash Flows

($ in millions)	Nine months ended September 30
(unaudited)	2019			2018
Cash flows from operating activities:
Net income	$	54.7		$	37.3
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization, net	6.2			6.7
Share-based compensation	7.0			5.7
Net investment gain	(50.2		)	(18.2		)
Changes in operating assets and liabilities:
Deferred policy acquisition costs	(12.4		)	5.8
Accrued investment income and other assets	(2.3		)	(3.0		)
Postretirement and pension benefits	(12.2		)	(16.3		)
Other liabilities and due to/from affiliates, net	(55.0		)	19.0
Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums	(2.6		)	(2.3		)
Losses and loss expenses payable	(54.1		)	(56.9		)
Unearned premiums	65.0			(16.2		)
Deferred tax (benefit) expense on share-based awards	(0.7		)	—
Federal income taxes	12.7			8.1
Net cash used in operating activities	(43.9		)	(30.3		)
Cash flows from investing activities:
Purchases of fixed maturities available-for-sale	(459.9		)	(267.0		)
Purchases of equity securities	(48.9		)	(82.2		)
Purchases of other invested assets	(12.9		)	(1.1		)
Maturities, calls and pay downs of fixed maturities available-for-sale	267.1			180.4
Sales of fixed maturities available-for-sale	248.7			69.7
Sales of equity securities	34.4			89.3
Sales of other invested assets	1.0			0.9
Net disposals of property and equipment	1.6			—
Net cash provided by (used in) investing activities	31.1			(10.0		)
Cash flows from financing activities:
Proceeds from issuance of common stock	4.8			11.7
Payments to acquire treasury stock	(0.5		)	(0.2		)
Payment of dividends	(13.0		)	(12.8		)
Payment of prepayment fee	—			(0.4		)
Net cash used in financing activities	(8.7		)	(1.7		)
Net decrease in cash and cash equivalents	(21.5		)	(42.0		)
Cash and cash equivalents at beginning of period	59.8			91.5
Cash and cash equivalents at end of period	$	38.3		$	49.5
Supplemental disclosures:
Interest expense (affiliates $0.7 and $0.7, respectively)	$	3.5		$	4.5

See accompanying notes to condensed consolidated financial statements.

8

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of State Auto Financial Corporation and Subsidiaries (“State Auto Financial” or the “Company”) have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of the Company, all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The balance sheet at December 31, 2018, has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the 2018 Form 10-K.

Revisions of Previously Issued Financial Statements

Revisions to certain line items in the consolidated statements of comprehensive income and consolidated statements of cash flows for the three and nine months ended September 30, 2018, were affected by revisions of previously issued financial statements.  All such changes to the consolidated statements of cash flows were included within cash flows from operating activities and all related changes in the consolidated statements of comprehensive income were isolated to unrecognized benefit plan obligations.  The basis of these revisions were described in Note 2 to our Consolidated Financial Statements set forth in Part II, Item 8, "Financial Statements and Supplementary Data" included in the 2018 Form 10-K.

Adoption of Recent Accounting Pronouncements

Leases

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" that amended previous guidance on lease accounting. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance became effective beginning January 1, 2019 and it did not have a material impact on the Company’s results of operations, consolidated financial position or cash flows. The Company has elected the practical expedients contained in ASC 842-10-65-1(f) and therefore did not reassess the lease classification of its existing leases.

Pending Adoption of Recent Accounting Pronouncements

For information regarding other accounting pronouncements that the Company has not yet adopted, see the “Pending Adoption of Recent Accounting Pronouncements” section of Note 1 of the Notes to Consolidated Financial Statements in the 2018 Form 10-K.

9

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

2. Investments

The following tables set forth the cost or amortized cost and fair value of investments by lot at September 30, 2019 and December 31, 2018:

($ millions)	Cost or amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Fair value
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	516.4	$	14.8	$	(1.2	)	$	530.0
Obligations of states and political subdivisions	415.3		21.8		—			437.1
Corporate securities	492.3		10.9		(1.1		)	502.1
U.S. government agencies mortgage-backed securities	705.0		18.2		(3.1		)	720.1
Total available-for-sale fixed maturities	$	2,129.0	$	65.7	$	(5.4	)	$	2,189.3
($ millions)	Cost or amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Fair value
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	438.4	$	3.2	$	(9.2	)	$	432.4
Obligations of states and political subdivisions	408.2		7.3		(0.9		)	414.6
Corporate securities	551.7		0.6		(11.7		)	540.6
U.S. government agencies mortgage-backed securities	789.9		3.3		(21.3		)	771.9
Total available-for-sale fixed maturities	$	2,188.2	$	14.4	$	(43.1	)	$	2,159.5

10

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

The following tables set forth the Company’s gross unrealized losses and fair value on its investments by lot, aggregated by investment category and length of time for individual securities that have been in a continuous unrealized loss position at September 30, 2019 and December 31, 2018:

($ millions, except # of positions)	Less than 12 months						12 months or more						Total
	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions
September 30, 2019
Fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	41.1	$	(0.1	)	9	$	184.5	$	(1.1	)	16	$	225.6	$	(1.2	)	25
Obligations of states and political subdivisions	—		—			—	4.1		—			1	4.1		—			1
Corporate securities	20.3		(0.3		)	2	56.9		$	(0.8	)	9	77.2		$	(1.1	)	11
U.S. government agencies mortgage-backed securities	50.9		(0.3		)	7	161.1		(2.8		)	35	212.0		(3.1		)	42
Total temporarily impaired securities	$	112.3	$	(0.7	)	18	$	406.6	$	(4.7	)	61	$	518.9	$	(5.4	)	79
($ millions, except # of positions)	Less than 12 months						12 months or more						Total
	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions
December 31, 2018
Fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	83.1	$	(1.8	)	7	$	259.6	$	(7.4	)	35	$	342.7	$	(9.2	)	42
Obligations of states and political subdivisions	63.6		(0.5		)	7	39.6		(0.4		)	8	103.2		(0.9		)	15
Corporate securities	244.0		(3.0		)	31	189.5		(8.7		)	30	433.5		(11.7		)	61
U.S. government agencies mortgage-backed securities	169.5		(2.8		)	18	385.5		(18.5		)	70	555.0		(21.3		)	88
Total temporarily impaired securities	$	560.2	$	(8.1	)	63	$	874.2	$	(35.0	)	143	$	1,434.4	$	(43.1	)	206

The Company reviewed its investments at September 30, 2019, and determined that no other-than-temporary impairment ("OTTI") existed in the gross unrealized holding losses.

The Company regularly monitors its available-for-sale investments that have fair values less than cost or amortized cost for signs of other-than-temporary impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery. When a fixed maturity has been determined to have an other-than-temporary impairment, the impairment charge is separated into an amount representing the credit loss, which is recognized in earnings as a realized loss, and the amount related to non-credit factors, which is recognized in accumulated other comprehensive income. Future increases or decreases in fair value, if not other-than-temporary, are included in accumulated other comprehensive income.

11

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturities by contractual maturity at September 30, 2019:

($ millions)	Amortized cost		Fair value
Due in 1 year or less	$	55.7	$	56.6
Due after 1 year through 5 years	562.7		569.4
Due after 5 years through 10 years	239.9		249.7
Due after 10 years	565.7		593.5
U.S. government agencies mortgage-backed securities	705.0		720.1
Total	$	2,129.0	$	2,189.3

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations with or without call or prepayment penalties.

At September 30, 2019, State Auto P&C had U.S. government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $106.5 million, that were pledged as collateral for the FHLB Loans (as defined in Note 3). In accordance with the terms of the FHLB Loans, State Auto P&C retains all rights regarding these pledged securities.

At September 30, 2019, State Auto P&C had fixed maturities with fair values of approximately $23.2 million pledged as collateral for the performance obligations under its reinsurance agreement with Home State County Mutual Insurance Company. In accordance with the terms of the trust agreement, State Auto P&C retains all rights regarding these securities, which are included in the “U.S. treasury securities and obligations of U.S. government agencies” classification of the Company’s fixed maturity securities portfolio.

Fixed maturities with fair values of $9.3 million and $8.9 million were on deposit with insurance regulators as required by law at September 30, 2019, and December 31, 2018, respectively. The Company retains all rights regarding these securities.

The following table sets forth the components of net investment income for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30				Nine months ended September 30
	2019		2018		2019		2018
Fixed maturities	$	15.3	$	16.4	$	47.7	$	49.4
Equity securities	3.0		3.0		8.9		8.6
Cash and cash equivalents, and other	1.1		1.7		4.2		5.2
Investment income	19.4		21.1		60.8		63.2
Investment expenses	0.1		0.3		0.4		1.0
Net investment income	$	19.3	$	20.8	$	60.4	$	62.2

The Company’s current investment strategy does not rely on the use of derivative financial instruments.

Proceeds on sales of investments were $284.1 million and $159.9 million for the nine months ended September 30, 2019, and 2018, respectively.

12

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

The following table sets forth the realized and unrealized holding gains (losses) on the Company’s investment portfolio for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Investment gains (losses), net:
Fixed maturities:
Realized gains on sales of securities	1.2			—			2.8			1.7
Net gains on fixed maturities	1.2			—			2.8			1.7
Equity securities:
Realized (losses) gains on sales of securities, net	(1.8		)	1.0			(2.5		)	5.4
Unrealized (losses) gains on securities still held, net	(4.1		)	16.4			46.4			12.8
Net (losses) gains on equity securities	(5.9		)	17.4			43.9			18.2
Other invested assets:
Unrealized (losses) gains on securities still held, net	(0.3		)	0.4			4.8			(1.7		)
Net (losses) gains on other invested assets	(0.3		)	0.4			4.8			(1.7		)
Other net realized loss	—			—			(1.3		)	—
Net (losses) gains on investments	$	(5.0	)	$	17.8		$	50.2		$	18.2
Change in unrealized holding gains (losses), net of tax:
Fixed maturities	$	21.4		$	(14.7	)	$	89.0		$	(63.3	)
Deferred federal income tax (liability) benefit	(4.5		)	3.1			(18.7		)	13.3
Change in net unrealized holding gains (losses), net of tax	$	16.9		$	(11.6	)	$	70.3		$	(50.0	)

3. Fair Value of Financial Instruments

Below is the fair value hierarchy that categorizes into three levels the inputs to valuation techniques that are used to measure fair value:

• Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date.

• Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1, and it includes valuation techniques which use prices for similar assets and liabilities.

• Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

The Company utilizes a nationally recognized third party pricing service to estimate the majority of its investment portfolio’s fair value. The Company obtains one price per security and the processes and control procedures employed by the Company are designed to ensure the value is accurately recorded on an unadjusted basis. Through discussions with the pricing service, the Company gains an understanding of the methodologies used to price the different types of securities, that the data and the valuation methods utilized are appropriate and consistently applied, and that the assumptions are reasonable and representative of fair value. To validate the reasonableness of the valuations obtained from the pricing service, the Company compares to fair value pricing information gathered from other independent pricing sources. At September 30, 2019, and December 31, 2018, the Company did not adjust any of the prices received from the pricing service.

13

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

Fixed Maturities

The Company utilizes a nationally recognized third party pricing service to estimate fair value measurements for the majority of its fixed maturities. The fair value estimate of the Company’s fixed maturity investments are determined by evaluations that are based on observable market information rather than market quotes. Inputs to the evaluations include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, and other market-observable information. The fixed maturity portfolio pricing obtained from the pricing service is reviewed for reasonableness. The Company regularly selects a sample of security prices which are compared to one or more alternative pricing sources for reasonableness. Any significant discrepancies with the pricing are returned to the pricing service for further explanation and, if necessary, adjustments are made. To date, the Company has not identified any significant discrepancies in the pricing provided by its third party pricing service. Investments valued using these inputs include U.S. treasury securities and obligations of U.S. government agencies, obligations of states and political subdivisions, corporate securities (except for a security discussed below), and U.S. government agencies' mortgage-backed securities. All unadjusted estimates of fair value for fixed maturities priced by the pricing service are included in the amounts disclosed in Level 2 of the hierarchy. If market inputs are unavailable, then no fair value is provided by the pricing service. For these securities, fair value is determined either by requesting brokers who are knowledgeable about these securities to provide a quote; or the Company internally determines the fair values by employing widely accepted pricing valuation models, and depending on the level of observable market inputs, renders the fair value estimate as Level 2 or Level 3.

Transfers between level categorizations may occur due to changes in the availability of market observable inputs. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred.

Equities

The fair value of each equity security is based on an observable market price for an identical asset in an active market and is priced by the same pricing service discussed above. All equity securities are recorded using unadjusted market prices and have been disclosed in Level 1.

 Other Invested Assets

Included in other invested assets is one international fund (“the fund”) that invests in equity securities of foreign issuers and is managed by a third party investment manager. The fund had a fair value of $51.7 million and $38.5 million at September 30, 2019, and December 31, 2018, respectively, which was determined using the fund’s net asset value. The Company employs procedures to assess the reasonableness of the fair value of the fund, including obtaining and reviewing the fund’s audited financial statements. There are no unfunded commitments related to the fund. The Company may not sell its investment in the fund; however, the Company may redeem all or a portion of its investment in the fund at net asset value per share with the appropriate prior written notice. In accordance with Accounting Standard Codification 820-10, this investment is measured at fair value using the net asset value per share practical expedient and has not been classified in the fair value hierarchy. Fair values presented here are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets.

The remainder of the Company’s other invested assets consist primarily of holdings in publicly-traded mutual funds. The Company believes that its prices for these publicly-traded mutual funds based on an observable market price for an identical asset in an active market reflect their fair values and consequently these securities have been disclosed in Level 1.

14

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

 The following tables set forth the Company’s investments within the fair value hierarchy at September 30, 2019 and December 31, 2018:

($ millions)	Total		Level 1		Level 2
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	530.0	$	—	$	530.0
Obligations of states and political subdivisions	437.1		—		437.1
Corporate securities	502.1		—		502.1
U.S. government agencies mortgage-backed securities	720.1		—		720.1
Total available-for-sale fixed maturities	2,189.3		—		2,189.3
Equity securities:
Large-cap securities	99.1		99.1		—
Mutual and exchange traded funds	274.2		274.2		—
Total equity securities	373.3		373.3		—
Other invested assets	12.9		12.9		—
Total investments	$	2,575.5	$	386.2	$	2,189.3
($ millions)	Total		Level 1		Level 2
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	432.4	$	—	$	432.4
Obligations of states and political subdivisions	414.6		—		414.6
Corporate securities	540.6		—		540.6
U.S. government agencies mortgage-backed securities	771.9		—		771.9
Total available-for-sale fixed maturities	2,159.5		—		2,159.5
Equity securities:
Large-cap securities	77.2		77.2		—
Mutual and exchange traded funds	237.8		237.8		—
Total equity securities	315.0		315.0		—
Other invested assets	10.3		10.3		—
Total investments	$	2,484.8	$	325.3	$	2,159.5

The following sections describe the valuation methods used by the Company for each type of financial instrument it holds that is not measured at fair value but for which fair value is disclosed:

Financial Instruments Disclosed, But Not Carried, At Fair Value

Other Invested Assets, at Cost

Included in other invested assets, at cost are common stock of the Federal Home Loan Bank of Cincinnati (the "FHLB") and the Trust Securities. The Trust Securities and FHLB common stock are carried at cost, which approximates fair value. The fair value of the FHLB common stock at September 30, 2019, was $6.0 million and the fair value of the Trust Securities was $0.5 million. The investments have been placed in Level 3 of the fair value hierarchy.

15

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

Notes Receivable from Affiliate

In May 2009, the Company entered into two separate credit agreements with State Automobile Mutual Insurance Company (“State Auto Mutual") pursuant to which it loaned State Auto Mutual a total of $70.0 million at an interest rate of 7.00%. In May 2019, the Company refinanced the two credit agreements with State Auto Mutual at an interest rate of 4.05%, with principal payable in May 2029. The Company estimates the fair value of the notes receivable from affiliate using market quotations for U.S. treasury securities with similar maturity dates and applies an appropriate credit spread. Consequently this has been placed in Level 2 of the fair value hierarchy.

($ millions, except interest rates)	September 30, 2019						December 31, 2018
	Carrying value		Fair value		Interest rate		Carrying value		Fair value		Interest rate
Notes receivable from affiliate, May 2009	$	—	$	—	—	%	$	70.0	$	71.1	7.00	%
Notes receivable from affiliate, May 2019	$	70.0	$	76.8	4.05	%	$	—	$	—	—	%

Notes Payable

Included in notes payable are the FHLB Loans and Subordinated Debentures. The Company estimates the fair value of the FHLB Loans by discounting cash flows using a borrowing rate currently available to the Company for loans with similar terms. The FHLB Loans have been placed in Level 3 of the fair value hierarchy. The carrying amount of the Subordinated Debentures approximates its fair value as the interest rate adjusts quarterly and has been disclosed in Level 3.

($ millions, except interest rates)	September 30, 2019						December 31, 2018
	Carrying value		Fair Value		Interest rate		Carrying value		Fair value		Interest rate
FHLB Loan due 2021: issued $21.5, September 2016 with fixed interest	$	21.5	$	21.5	1.73	%	$	21.5	$	20.9	1.73	%
FHLB Loan due 2033: issued $85.0, May 2018 with fixed interest	85.3		100.1		3.96	%	85.3		89.0		3.96	%
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest	15.2		15.2		6.33	%	15.2		15.2		6.94	%
Total notes payable	$	122.0	$	136.8			$	122.0	$	125.1

16

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

4. Losses and Loss Expenses Payable

The following table sets forth the activity in the liability for losses and loss expenses for the nine months ended September 30, 2019 and 2018:

($ millions)	2019			2018
Losses and loss expenses payable, at beginning of period	$	1,146.8		$	1,255.6
Less: reinsurance recoverable on losses and loss expenses payable	5.5			3.1
Net balance at beginning of period	1,141.3			1,252.5
Incurred related to:
Current year	692.7			678.7
Prior years	(55.1		)	(57.6		)
Total incurred	637.6			621.1
Paid related to:
Current year	366.4			314.1
Prior years	327.0			365.8
Total paid	693.4			679.9
Net balance at end of period	1,085.5			1,193.7
Plus: reinsurance recoverable on losses and loss expenses payable	7.2			5.0
Losses and loss expenses payable, at end of period	$	1,092.7		$	1,198.7

The Company recorded favorable development related to prior years’ loss and loss expense reserves for the nine months ended September 30, 2019, of $55.1 million compared to favorable development of $57.6 million for the same 2018 period. Favorable development of prior accident years' non-catastrophe loss and ALAE reserves for the nine months ended September 30, 2019 was $54.1 million. In the personal insurance segment, personal auto contributed $11.0 million of favorable development. In the commercial insurance segment, all lines contributed favorable development, with workers' compensation, small commercial package, and middle market commercial contributing $13.4 million, $11.8 million, and $7.2 million, respectively.

For the nine months ended September 30, 2018, favorable development of prior accident years' non-catastrophe loss and ALAE reserves was primarily due to $56.4 million of favorable development in the personal and commercial insurance segments. In the personal insurance segment, personal auto contributed $18.5 million of favorable development and homeowners contributed $7.2 million of favorable development. In the commercial insurance segment all lines contributed favorable development, with workers' compensation, small commercial package and commercial auto contributing $8.4 million, $6.5 million, and $5.7 million, respectively. Slightly offsetting the favorable development was adverse development in the specialty insurance segment of $4.1 million. The specialty insurance segment was impacted by $3.4 million and $0.9 million of adverse development in E&S casualty and programs, respectively.

5. Reinsurance

The insurance subsidiaries of State Auto Financial, including State Auto P&C, Milbank and SA Ohio (collectively referred to as the “STFC Pooled Companies”) participate in a quota share reinsurance pooling arrangement (“the Pooling Arrangement”) with State Auto Mutual and its subsidiaries and affiliates (collectively referred to as the “Mutual Pooled Companies”).

17

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

The following table sets forth a summary of the Company’s external reinsurance transactions, as well as reinsurance transactions with State Auto Mutual under the Pooling Arrangement, for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Premiums earned:
Assumed from external insurers and reinsurers	$	21.0		$	17.3		$	59.3		$	41.9
Assumed under Pooling Arrangement	319.6			306.8			930.0			929.2
Ceded to external insurers and reinsurers	(6.6		)	(5.9		)	(18.8		)	(16.7		)
Ceded under Pooling Arrangement	(263.9		)	(234.9		)	(761.5		)	(678.1		)
Net assumed premiums earned	$	70.1		$	83.3		$	209.0		$	276.3
Losses and loss expenses incurred:
Assumed from external insurers and reinsurers	$	14.6		$	10.9		$	45.6		$	34.2
Assumed under Pooling Arrangement	209.3			191.4			639.4			622.3
Ceded to external insurers and reinsurers	(0.6		)	(1.9		)	(6.2		)	(3.4		)
Ceded under Pooling Arrangement	(185.1		)	(148.4		)	(514.3		)	(486.0		)
Net assumed losses and loss expenses incurred	$	38.2		$	52.0		$	164.5		$	167.1

6. Income Taxes

The following table sets forth the reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30										Nine months ended September 30
	2019					2018					2019					2018
Amount at statutory rate	$	2.7		21.0	%	$	8.6		21.0	%	$	14.0		21.0	%	$	9.5		21.0	%
Tax-exempt interest and dividends received deduction	(0.7		)	(5.3	)	(0.5		)	(1.3	)	(2.1		)	(3.1	)	(1.7		)	(3.8	)
Other, net	(0.8		)	(6.3	)	(0.5		)	(1.1	)	0.1			—		0.3			0.6
Federal income tax expense	1.2			9.4	%	7.6			18.6	%	12.0			17.9	%	$	8.1		17.8	%

7. Pension and Postretirement Benefit Plans

The following table sets forth information regarding the Company’s share of pension and postretirement benefit plans’

components of net periodic cost for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Pension						Postretirement						Pension						Postretirement
	Three months ended September 30												Nine months ended September 30
	2019			2018			2019			2018			2019			2018			2019			2018
Service cost	$	0.8		$	1.2		$	—		$	—		$	2.8		$	3.8		$	—		$	—
Interest cost	2.9			2.7			0.2			0.2			8.6			8.0			0.5			0.5
Expected return on plan assets	(4.2		)	(4.5		)	—			—			(12.5		)	(13.5		)	—			—
Amortization of:
Negative prior service cost	—			—			(1.4		)	(1.4		)	—			—			(4.1		)	(4.1		)
Net actuarial loss	1.5			2.1			0.1			0.1			4.5			6.2			0.2			0.2
Net periodic cost (benefit)	$	1.0		$	1.5		$	(1.1	)	$	(1.1	)	$	3.4		$	4.5		$	(3.4	)	$	(3.4	)

The Company contributed $10.0 million to its pension plan for the nine months ended September 30, 2019.

18

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

8. Other Comprehensive Income and Accumulated Other Comprehensive Loss

The following tables set forth the changes in the Company’s accumulated other comprehensive (loss) income ("AOC(L)I"), net of tax, for the three and nine months ended September 30, 2019 and 2018:

($ millions)		Unrealized Gains and Losses on Available-for-Sale  Securities			Benefit Plan Items			Total
Beginning balance at July 1, 2019		$	33.2		$	(74.9	)	$	(41.7	)
Other comprehensive income before reclassifications		17.8			—			17.8
Amounts reclassified from AOCI (a)		(0.9		)	0.6			(0.3		)
Net current period other comprehensive income		16.9			0.6			17.5
Ending balance at September 30, 2019		$	50.1		$	(74.3	)	$	(24.2	)
Beginning balance at July 1, 2018		$	(20.3	)	$	(75.5	)	$	(95.8	)
Other comprehensive loss before reclassifications		(11.6		)	—			(11.6		)
Amounts reclassified from AOCI (a)		—			1.3			1.3
Net current period other comprehensive (loss) income		(11.6		)	1.3			(10.3		)
Ending balance at September 30, 2018		$	(31.9	)	$	(74.2	)	$	(106.1	)
(a)	See separate table below for details about these reclassifications

($ millions)		Unrealized Gains and Losses on Available-for-Sale  Securities			Benefit Plan Items			Total
Beginning balance at January 1, 2019		$	(20.2	)	$	(76.2	)	$	(96.4	)
Other comprehensive income before reclassifications		72.5			—			72.5
Amounts reclassified from AOCI (a)		(2.2		)	1.9			(0.3		)
Net current period other comprehensive income		70.3			1.9			72.2
Ending balance at September 30, 2019		$	50.1		$	(74.3	)	$	(24.2	)
Beginning balance at January 1, 2018		$	66.0		$	(62.2	)	$	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		(47.9		)	(16.0		)	(63.9		)
Other comprehensive loss before reclassifications		(48.7		)	—			(48.7		)
Amounts reclassified from AOCI (a)		(1.3		)	4.0			2.7
Net current period other comprehensive (loss) income		(50.0		)	4.0			(46.0		)
Ending balance at September 30, 2018		$	(31.9	)	$	(74.2	)	$	(106.1	)
(a)	See separate table below for details about these reclassifications

19

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

The following tables set forth the reclassifications out of accumulated other comprehensive income, by component, to the Company’s condensed consolidated statement of income for the three and nine months ended September 30, 2019 and 2018:

($ millions)
Details about Accumulated Other		Three months ended September 30						Affected line item in the Condensed
Comprehensive Income Components								Consolidated Statements of Income
		2019			2018
Unrealized gains on available-for-sale fixed maturity investments		$	1.2		$	—		Realized gains on sale of securities
		1.2			—			Total before tax
		(0.3		)	—			Tax expense
		0.9			—			Net of tax
Amortization of benefit plan items
Negative prior service cost		1.6			1.6			(b)
Net actuarial loss		(2.4		)	(3.3		)	(b)
		(0.8		)	(1.7		)	Total before tax
		0.2			0.4			Tax benefit
		(0.6		)	(1.3		)	Net of tax
Total reclassifications for the period		$	0.3		$	(1.3	)
(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).

($ millions)
Details about Accumulated Other		Nine months ended September 30						Affected line item in the Condensed
Comprehensive Income Components								Consolidated Statements of Income
		2019			2018
Unrealized gains on available-for-sale fixed maturity investments		$	2.8		$	1.7		Realized gain on sale of securities
		2.8			1.7			Total before tax
		(0.6		)	(0.4		)	Tax expense
		2.2			1.3			Net of tax
Amortization of benefit plan items
Negative prior service cost		4.8			4.8			(b)
Net actuarial loss		(7.2		)	(9.9		)	(b)
		(2.4		)	(5.1		)	Total before tax
		0.5			1.1			Tax benefit
		(1.9		)	(4.0		)	Net of tax
Total reclassifications for the period		$	0.3		$	(2.7	)
(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).

20

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

9. Net Earnings per Common Share

The following table sets forth the compilation of basic and diluted (loss) earnings per common share for the three and nine months ended September 30, 2019 and 2018:

($ and shares in millions, except per share amounts)	Three months ended September 30				Nine months ended September 30
	2019		2018		2019		2018
Numerator:
Net income for basic earnings per common share	$	11.5	$	33.4	$	54.7	$	37.3
Denominator:
Weighted average shares for basic (loss) earnings per common share	43.5		43.0		43.4		42.8
Effect of dilutive share-based awards	0.5		0.6		0.6		0.5
Adjusted weighted average shares for diluted net (loss) earnings per common share	44.0		43.6		44.0		43.3
Basic net earnings per common share	$	0.26	$	0.78	$	1.26	$	0.87
Diluted net earnings per common share	$	0.25	$	0.76	$	1.25	$	0.86

The following table sets forth common stock options, stock awards and restricted share units ("RSU award") of the Company that were not included in the computation of diluted earnings per common share because the exercise price of the options, or awards, was greater than the average market price or their inclusion would have been antidilutive for the three and nine months ended September 30, 2019 and 2018:

(shares in millions)	Three months ended September 30		Nine months ended September 30
	2019	2018	2019	2018
Total number of antidilutive options and awards	—	—	—	0.1

21

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

10. Segment Information

The Company changed its reportable segments from four to three effective January 1, 2019. The exit from the specialty insurance business resulted in the elimination of specialty insurance as a reportable segment as it no longer is material to the Company's results and is disclosed as "specialty run-off." The three remaining reportable segments are: personal insurance, commercial insurance, and investment operations. The reportable insurance segments are business units managed separately because of the differences in the type of customers they serve, the products they provide or services they offer. The insurance segments market a broad line of property and casualty insurance products throughout the United States through independent insurance agencies, which include retail agents and wholesale brokers. The investment operations segment, managed by Stateco, provides investment services.

The Company evaluates the performance of its insurance segments using industry financial measurements based on Statutory Accounting Practices (“SAP”), which include loss and loss adjustment expense ratios, underwriting expense ratios, combined ratios, statutory underwriting gain (loss), net premiums earned and net written premiums. One of the most significant differences between SAP and GAAP is that SAP requires all underwriting expenses to be expensed immediately and not deferred and amortized over the same period the premium is earned.

The investment operations segment is evaluated based on investment returns of assets managed by Stateco. Asset information by segment is not reported for the insurance segments because the Company does not produce such information internally.

22

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

The following table sets forth financial information regarding the Company’s reportable segments and specialty run-off for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Revenue from external sources:
Insurance operations
Personal insurance	$	192.7		$	173.0		$	562.5		$	494.2
Commercial insurance	127.0			115.2			361.4			345.7
Specialty run-off	(0.1		)	18.6			6.1			89.3
Total insurance operations	319.6			306.8			930.0			929.2
Investment operations
Net investment income	19.3			20.8			60.4			62.2
Net investment (loss) gain	(5.0		)	17.8			50.2			18.2
Total investment operations	14.3			38.6			110.6			80.4
All other	0.6			0.6			1.6			1.8
Total revenue from external sources	334.5			346.0			1,042.2			1,011.4
Intersegment revenue	1.7			1.6			4.9			4.8
Total revenue	336.2			347.6			1,047.1			1,016.2
Reconciling items:
Eliminate intersegment revenue	(1.7		)	(1.6		)	(4.9		)	(4.8		)
Total consolidated revenues	$	334.5		$	346.0		$	1,042.2		$	1,011.4
Segment (loss) income before federal income tax:
Insurance operations SAP underwriting (loss) gain
Personal insurance	$	(6.3	)	$	6.9		$	(32.0	)	$	(4.6	)
Commercial insurance	1.2			(5.2		)	(17.1		)	(22.3		)
Specialty run-off	(0.6		)	1.9			(1.3		)	4.5
Total insurance operations	(5.7		)	3.6			(50.4		)	(22.4		)
Investment operations
Net investment income	19.3			20.8			60.4			62.2
Net investment (loss) gain	(5.0		)	17.8			50.2			18.2
Total investment operations	14.3			38.6			110.6			80.4
All other	—			0.1			0.2			0.3
Total segment income before reconciling items	8.6			42.3			60.4			58.3
Reconciling items:
GAAP expense adjustments	7.2			0.8			17.3			(2.6		)
Interest expense on corporate debt	(1.2		)	(1.2		)	(3.7		)	(4.5		)
Corporate expenses	(1.9		)	(0.9		)	(7.3		)	(5.8		)
Total reconciling items	4.1			(1.3		)	6.3			(12.9		)
Total consolidated income before federal income tax	$	12.7		$	41.0		$	66.7		$	45.4

Investable assets attributable to the Company’s investment operations segment totaled $2,742.0 million and $2,658.7 million at September 30, 2019, and December 31, 2018, respectively.

23

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Notes to Condensed Consolidated Financial Statements, Continued (Unaudited)

11.  Contingencies and Litigation

In accordance with the Contingencies Topic of the FASB's Accounting Standards Codification, the Company accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount can be reasonably estimated. The Company reviews all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, the Company cannot reasonably estimate a loss or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. If the loss contingency in question is not both probable and reasonably estimable, the Company does not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. Based on currently available information known to the Company, it believes that its reserves for litigation-related liabilities are reasonable. However, in the event that a legal proceeding results in a substantial judgment against, or settlement by, the Company, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on the financial condition, results of operations or cash flows of the consolidated financial statements of the Company.

The Company is involved in lawsuits in the ordinary course of its business arising out of or otherwise related to its insurance policies. Additionally, from time to time the Company may be involved in lawsuits, including class actions, in the ordinary course of business but not arising out of or otherwise related to its insurance policies. These lawsuits are in various stages of development. The Company generally will contest these matters vigorously but may pursue settlement if appropriate. Based on currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits will be material to its results of operations or have a material adverse effect on its consolidated financial position, results of operations or cash flows.

Additionally, the Company may be impacted by adverse regulatory actions and adverse court decisions where insurance coverages are expanded beyond the scope originally contemplated in its insurance policies. The Company believes that the effects, if any, of such regulatory actions and published court decisions are not likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows.

24

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The term “State Auto Financial” as used below refers only to State Auto Financial Corporation and the terms “our Company,” “we,” “us,” and “our” as used below refer to State Auto Financial Corporation and its consolidated subsidiaries. The term “third quarter” as used below refers to the three months ended September 30 for the time period then ended. For a glossary of terms for State Auto Financial Corporation and its subsidiaries and affiliates and a glossary of selected insurance and accounting terms, see the section entitled “Important Defined Terms Used in this Form 10-K” included in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”).

The discussion and analysis presented below relates to the material changes in financial condition and results of operations for our consolidated balance sheets as of September 30, 2019 and December 31, 2018, and for the consolidated statements of income for the three and nine month periods ended September 30, 2019 and 2018. This discussion and analysis should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the 2018 Form 10-K, and in particular the discussions in those sections thereof entitled “Overview,” “Executive Summary,” and “Critical Accounting Policies.” Readers are encouraged to review the entire 2018 Form 10-K, as it includes information regarding our Company not discussed in this Form 10-Q. This information will assist in your understanding of the discussion of our current period financial results.

The discussion and analysis presented below includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Forward-looking statements speak only as of the date the statements were made available. Although we believe that the expectations reflected in forward-looking statements have a reasonable basis, we can give no assurance that these expectations will prove to be correct. Forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. For a discussion of the most significant risks and uncertainties that could cause our actual results to differ materially from those projected, see “Risk Factors” in Item 1A of the 2018 Form 10-K, updated by Part II, Item 1A of this Form 10-Q. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

We have three reportable segments: personal insurance, commercial insurance, and investment operations. The reportable insurance segments are business units managed separately because of the differences in the type of customers they serve or products they provide or services they offer. The insurance segments market a broad line of property and casualty insurance products throughout the United States through independent insurance agencies, which include retail agents and wholesale brokers. The investment operations segment, managed by Stateco, provides investment services. See “Personal and Commercial Insurance” in Item 1 of the 2018 Form 10-K for more information about our insurance segments. As previously disclosed, we stopped writing our specialty insurance business on a net basis in 2018. As a result, effective January 1, 2019, the specialty insurance business is no longer a reportable segment as it no longer is material to our results and is disclosed as "specialty run-off." Financial information about our reportable segments for 2019 is set forth in Note 10 of our condensed consolidated financial statements included in Item 1 of this Form 10-Q.

25

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

 POOLING ARRANGEMENT

The STFC Pooled Companies and the Mutual Pooled Companies participate in a quota share reinsurance pooling arrangement referred to as the “Pooling Arrangement." Under the Pooling Arrangement, State Auto Mutual assumes premiums, losses and expenses from each of the Pooled Companies and in turn cedes to each of the Pooled Companies a specified portion of premiums, losses and expenses based on each of the Pooled Companies’ respective pooling percentages. State Auto Mutual then retains the balance of the pooled business.

The following table sets forth the participants and their participation percentages in the Pooling Arrangement:

STFC Pooled Companies:
State Auto P&C	51.0	%
Milbank	14.0
SA Ohio	—
Total STFC Pooled Companies	65.0	%
State Auto Mutual Pooled Companies:
State Auto Mutual	34.5	%
SA Wisconsin	—
Meridian Security	—
Patrons Mutual	0.5
RIC	—
Plaza	—
American Compensation	—
Bloomington Compensation	—
Total State Auto Mutual Pooled Companies	35.0	%

26

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

RESULTS OF OPERATIONS

 The following table sets forth certain key performance indicators we use to monitor our operations for the three and nine months ended September 30, 2019 and 2018:

($ millions, except per share amounts)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
GAAP Basis:
Total revenues	$	334.5		$	346.0		$	1,042.2		$	1,011.4
Income before federal income taxes	$	12.7		$	41.0		$	66.7		$	45.4
Net income	$	11.5		$	33.4		$	54.7		$	37.3
Basic earnings per share	$	0.26		$	0.78		$	1.26		$	0.87
Diluted earnings per share	$	0.25		$	0.76		$	1.25		$	0.86
Stockholders’ equity	$	943.7		$	831.6
Return on average equity (LTM)	3.4		%	3.7		%
Book value per share	$	21.68		$	19.36
Debt to capital ratio	11.4		%	12.8		%
Cat loss and ALAE ratio	3.3		%	5.3		%	8.1		%	6.8		%
Non-cat loss and LAE ratio	61.9		%	57.0		%	60.5		%	60.0		%
Loss and LAE ratio	65.2		%	62.3		%	68.6		%	66.8		%
Expense ratio	34.3		%	36.1		%	35.0		%	35.8		%
Combined ratio	99.5		%	98.4		%	103.6		%	102.6		%
Premium written growth	11.0		%	(2.8		)%	9.0		%	(5.9		)%
Investment yield	2.9		%	3.1		%	3.0		%	3.1		%
SAP Basis:
Cat loss and ALAE ratio	3.3		%	5.3		%	8.1		%	6.8		%
Non-cat loss and ALAE ratio	56.1		%	51.2		%	54.3		%	54.2		%
ULAE ratio	6.0		%	5.9		%	6.3		%	6.0		%
Loss and LAE ratio	65.4		%	62.4		%	68.7		%	67.0		%
Expense ratio	33.6		%	35.8		%	34.3		%	36.1		%
Combined ratio	99.0		%	98.2		%	103.0		%	103.1		%

	Twelve months ended September 30
	2019	2018
Net premiums written to surplus	1.5	1.4

Our pre-tax income for the three months ended September 30, 2019 was $12.7 million, a decrease of $28.3 million when compared to the same 2018 period. The change was primarily driven by (i) net investment losses of $5.0 million versus net investment gains of $17.8 million and (ii) a slight decline in net underwriting results, due to an increase in non-catastrophe losses, partially offset by an increase in earned premiums and lower catastrophe losses when compared to the same 2018 period.

Our pre-tax income for the nine months ended September 30, 2019 was $66.7 million, an increase of $21.3 million when compared to the same 2018 period. The change was primarily driven by net investment gains of $50.2 million compared to net investment gains of $18.2 million, partially offset by a decline in net underwriting results, due to increases in catastrophe and non-catastrophe losses when compared to the same 2018 period.

27

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Insurance Segments

We measure our top-line growth for our insurance segments based on net written premiums, which provides us with an indication of how well we are doing in terms of revenue growth before it is actually earned. Our policies provide a fixed amount of coverage for a stated period of time, often referred to as the “policy term.” As such, our written premiums are recognized as earned ratably over the policy term. The unearned portion of written premiums, called unearned premiums, is reflected on our balance sheet as a liability and represents our obligation to provide coverage for the unexpired term of the policies.

Insurance industry regulators require our insurance subsidiaries to report their financial condition and results of operations using SAP. We use SAP financial results, along with industry standard financial measures determined on a SAP basis and certain measures determined on a GAAP basis, to internally monitor the performance of our insurance segments and reward our employees.

One of the more significant differences between GAAP and SAP is that SAP requires all underwriting expenses to be expensed immediately and not deferred over the same period that the premium is earned. In converting SAP underwriting results to GAAP underwriting results, acquisition costs are deferred and amortized over the periods the related written premiums are earned. For a discussion of deferred acquisition costs, see “Critical Accounting Policies – Deferred Acquisition Costs” section included in Item 7 of our 2018 Form 10-K.

The accounting for pension benefits also contributes to the difference between our GAAP loss and expense ratios and our SAP loss and expense ratios. For a discussion of our pension and postretirement benefit obligations, see the “Critical Accounting Policies – Pension and Postretirement Benefit Obligations” section included in Item 7 of our 2018 Form 10-K.

All references to financial measures or components thereof in this discussion are calculated on a GAAP basis, unless otherwise noted.

28

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

The following tables set forth certain key performance indicators based on SAP for our insurance segments for the three and nine months ended September 30, 2019 and 2018:

($ in millions)
Three months ended September 30, 2019	Personal & Commercial			Specialty run-off			Total
Net written premiums	$	347.2		$	(0.4	)	$	346.8
Net earned premiums	319.7			(0.1		)	319.6
Losses and LAE incurred:
Cat loss and ALAE	10.3			0.3			10.6
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(15.2		)	(0.9		)	(16.1		)
Current accident year non-cat loss and ALAE	195.0			0.1			195.1
Total non-cat loss and ALAE	179.8			(0.8		)	179.0
Total Loss and ALAE	190.1			(0.5		)	189.6
ULAE	19.2			(0.1		)	19.1
Total Loss and LAE	209.3			(0.6		)	208.7
Underwriting expenses	115.5			1.1			116.6
Net underwriting loss	$	(5.1	)	$	(0.6	)	$	(5.7	)
Cat loss and ALAE ratio	3.2		%	N/M(1)			3.3		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(4.8		)%	N/M			(5.1		)%
Current accident year non-cat loss and ALAE ratio	61.0		%	N/M			61.2		%
Total non-cat loss and ALAE ratio	56.2		%	N/M			56.1		%
Total Loss and ALAE ratio	59.4		%	N/M			59.4		%
ULAE ratio	6.0		%	N/M			6.0		%
Total Loss and LAE ratio	65.4		%	N/M			65.4		%
Expense ratio	33.3		%	N/M			33.6		%
Combined ratio	98.7		%	N/M			99.0		%
(1) N/M = Not Meaningful

29

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

($ in millions)
Three months ended September 30, 2018	Personal & Commercial			Specialty run-off			Total
Net written premiums	$	312.9		$	(0.5	)	$	312.4
Net earned premiums	288.2			18.6			306.8
Losses and LAE incurred:
Cat loss and ALAE	15.9			0.4			16.3
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(19.9		)	1.8			(18.1		)
Current accident year non-cat loss and ALAE	163.7			11.4			175.1
Total non-cat loss and ALAE	143.8			13.2			157.0
Total Loss and ALAE	159.7			13.6			173.3
ULAE	17.3			0.8			18.1
Total Loss and LAE	177.0			14.4			191.4
Underwriting expenses	109.5			2.3			111.8
Net underwriting gain	$	1.7		$	1.9		$	3.6
Cat loss and ALAE ratio	5.5		%	2.2		%	5.3		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(6.9		)%	9.4		%	(5.9		)%
Current accident year non-cat loss and ALAE ratio	56.8		%	62.1		%	57.1		%
Total non-cat loss and ALAE ratio	49.9		%	71.5		%	51.2		%
Total Loss and ALAE ratio	55.4		%	73.7		%	56.5		%
ULAE ratio	6.0		%	3.9		%	5.9		%
Total Loss and LAE ratio	61.4		%	77.6		%	62.4		%
Expense ratio	35.0		%	(439.2		)%	35.8		%
Combined ratio	96.4		%	(361.6		)%	98.2		%

30

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

($ in millions)
Nine months ended September 30, 2019	Personal & Commercial			Specialty run-off			Total
Net written premiums	$	994.0		$	0.5		$	994.5
Net earned premiums	923.9			6.1			930.0
Losses and LAE incurred:
Cat loss and ALAE	71.7			4.0			75.7
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(51.7		)	(2.4		)	(54.1		)
Current accident year non-cat loss and ALAE	553.6			4.9			558.5
Total non-cat loss and ALAE	501.9			2.5			504.4
Total Loss and ALAE	573.6			6.5			580.1
ULAE	59.6			(0.8		)	58.8
Total Loss and LAE	633.2			5.7			638.9
Underwriting expenses	339.8			1.7			341.5
Net underwriting loss	$	(49.1	)	$	(1.3	)	$	(50.4	)
Cat loss and ALAE ratio	7.8		%	N/M(1)			8.1		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(5.6		)%	N/M			(5.8		)%
Current accident year non-cat loss and ALAE ratio	59.9		%	N/M			60.1		%
Total non-cat loss and ALAE ratio	54.3		%	N/M			54.3		%
Total Loss and ALAE ratio	62.1		%	N/M			62.4		%
ULAE ratio	6.4		%	N/M			6.3		%
Total Loss and LAE ratio	68.5		%	N/M			68.7		%
Expense ratio	34.2		%	N/M			34.3		%
Combined ratio	102.7		%	N/M			103.0		%
(1) N/M = Not Meaningful

31

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

($ in millions)
Nine months ended September 30, 2018	Personal & Commercial			Specialty run-off			Total
Net written premiums	$	898.4		$	14.3		$	912.7
Net earned premiums	839.9			89.3			929.2
Losses and LAE incurred:
Cat loss and ALAE	63.4			0.2			63.6
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(56.4		)	4.2			(52.2		)
Current accident year non-cat loss and ALAE	496.0			59.4			555.4
Total non-cat loss and ALAE	439.6			63.6			503.2
Total Loss and ALAE	503.0			63.8			566.8
ULAE	51.0			4.5			55.5
Total Loss and LAE	554.0			68.3			622.3
Underwriting expenses	312.8			16.5			329.3
Net underwriting (loss) gain	$	(26.9	)	$	4.5		$	(22.4	)
Cat loss and ALAE ratio	7.6		%	0.2		%	6.8		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(6.7		)%	4.6		%	(5.6		)%
Current accident year non-cat loss and ALAE ratio	59.0		%	66.6		%	59.8		%
Total non-cat loss and ALAE ratio	52.3		%	71.2		%	54.2		%
Total Loss and ALAE ratio	59.9		%	71.4		%	61.0		%
ULAE ratio	6.1		%	5.0		%	6.0		%
Total Loss and LAE ratio	66.0		%	76.4		%	67.0		%
Expense ratio	34.8		%	115.9		%	36.1		%
Combined ratio	100.8		%	192.3		%	103.1		%

32

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Personal Insurance Segment

The following tables set forth certain key performance indicators based on SAP by major product line for our personal insurance segment for the three and nine months ended September 30, 2019 and 2018:

Table 1

($ in millions)
Three months ended September 30, 2019	Personal Auto			Homeowners			Other Personal			Total
Net written premiums	$	107.1		$	91.5		$	11.2		$	209.8
Net earned premiums	108.3			75.6			8.8			192.7
Losses and LAE incurred:
Cat loss and ALAE	0.9			7.0			0.3			8.2
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(1.2		)	—			(0.9		)	(2.1		)
Current accident year non-cat loss and ALAE	73.0			41.2			4.7			118.9
Total non-cat loss and ALAE	71.8			41.2			3.8			116.8
Total Loss and ALAE	72.7			48.2			4.1			125.0
ULAE	7.4			4.4			0.2			12.0
Total Loss and LAE	80.1			52.6			4.3			137.0
Underwriting expenses	30.9			27.8			3.3			62.0
Net underwriting (loss) gain	$	(2.7	)	$	(4.8	)	$	1.2		$	(6.3	)
Cat loss and ALAE ratio	0.8		%	9.2		%	3.5		%	4.2		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(1.2		)%	0.1		%	(9.8		)%	(1.1		)%
Current accident year non-cat loss and ALAE ratio	67.4		%	54.5		%	52.5		%	61.7		%
Total non-cat loss and ALAE ratio	66.2		%	54.6		%	42.7		%	60.6		%
Total Loss and ALAE ratio	67.0		%	63.8		%	46.2		%	64.8		%
ULAE ratio	6.9		%	5.8		%	2.0		%	6.2		%
Total Loss and LAE ratio	73.9		%	69.6		%	48.2		%	71.0		%
Expense ratio	28.9		%	30.3		%	29.6		%	29.6		%
Combined ratio	102.8		%	99.9		%	77.8		%	100.6		%

33

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Table 2

($ in millions)
Three months ended September 30, 2018	Personal Auto			Homeowners			Other Personal			Total
Net written premiums	$	110.7		$	76.6		$	8.0		$	195.3
Net earned premiums	103.5			63.7			5.8			173.0
Losses and LAE incurred:
Cat loss and ALAE	0.9			11.1			0.8			12.8
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(7.3		)	(1.5		)	(0.8		)	(9.6		)
Current accident year non-cat loss and ALAE	61.9			27.6			2.4			91.9
Total non-cat loss and ALAE	54.6			26.1			1.6			82.3
Total Loss and ALAE	55.5			37.2			2.4			95.1
ULAE	6.8			3.8			0.1			10.7
Total Loss and LAE	62.3			41.0			2.5			105.8
Underwriting expenses	32.6			24.9			2.8			60.3
Net underwriting gain (loss)	$	8.6		$	(2.2	)	$	0.5		$	6.9
Cat loss and ALAE ratio	0.8		%	17.4		%	13.7		%	7.4		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(7.1		)%	(2.3		)%	(14.5		)%	(5.6		)%
Current accident year non-cat loss and ALAE ratio	59.8		%	43.2		%	43.0		%	53.1		%
Total non-cat loss and ALAE ratio	52.7		%	40.9		%	28.5		%	47.5		%
Total Loss and ALAE ratio	53.5		%	58.3		%	42.2		%	54.9		%
ULAE ratio	6.6		%	5.9		%	1.1		%	6.2		%
Total Loss and LAE ratio	60.1		%	64.2		%	43.3		%	61.1		%
Expense ratio	29.5		%	32.6		%	34.4		%	30.9		%
Combined ratio	89.6		%	96.8		%	77.7		%	92.0		%

34

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Table 3

($ in millions)
Nine months ended September 30, 2019	Personal Auto			Homeowners			Other Personal			Total
Net written premiums	$	324.8		$	241.4		$	29.0		$	595.2
Net earned premiums	322.1			216.1			24.3			562.5
Losses and LAE incurred:
Cat loss and ALAE	5.4			47.8			4.0			57.2
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(11.0		)	0.5			(1.9		)	(12.4		)
Current accident year non-cat loss and ALAE	207.8			110.4			12.7			330.9
Total non-cat loss and ALAE	196.8			110.9			10.8			318.5
Total Loss and ALAE	202.2			158.7			14.8			375.7
ULAE	22.2			15.1			0.9			38.2
Total Loss and LAE	224.4			173.8			15.7			413.9
Underwriting expenses	96.7			74.8			9.1			180.6
Net underwriting gain (loss)	$	1.0		$	(32.5	)	$	(0.5	)	$	(32.0	)
Cat loss and ALAE ratio	1.6		%	22.1		%	16.5		%	10.2		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(3.4		)%	0.3		%	(7.8		)%	(2.2		)%
Current accident year non-cat loss and ALAE ratio	64.5		%	51.0		%	52.0		%	58.7		%
Total non-cat loss and ALAE ratio	61.1		%	51.3		%	44.2		%	56.5		%
Total Loss and ALAE ratio	62.7		%	73.4		%	60.7		%	66.7		%
ULAE ratio	6.9		%	7.0		%	3.7		%	6.8		%
Total Loss and LAE ratio	69.6		%	80.4		%	64.4		%	73.5		%
Expense ratio	29.8		%	31.0		%	31.5		%	30.4		%
Combined ratio	99.4		%	111.4		%	95.9		%	103.9		%

35

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Table 4

($ in millions)
Nine months ended September 30, 2018	Personal Auto			Homeowners			Other Personal			Total
Net written premiums	$	318.8		$	203.0		$	20.1		$	541.9
Net earned premiums	296.1			182.0			16.1			494.2
Losses and LAE incurred:
Cat loss and ALAE	4.8			38.1			2.2			45.1
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(18.5		)	(7.2		)	(1.1		)	(26.8		)
Current accident year non-cat loss and ALAE	193.6			81.9			8.0			283.5
Total non-cat loss and ALAE	175.1			74.7			6.9			256.7
Total Loss and ALAE	179.9			112.8			9.1			301.8
ULAE	17.7			12.4			0.6			30.7
Total Loss and LAE	197.6			125.2			9.7			332.5
Underwriting expenses	92.9			65.9			7.5			166.3
Net underwriting gain (loss)	$	5.6		$	(9.1	)	$	(1.1	)	$	(4.6	)
Cat loss and ALAE ratio	1.6		%	20.9		%	13.5		%	9.1		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(6.3		)%	(3.9		)%	(7.1		)%	(5.4		)%
Current accident year non-cat loss and ALAE ratio	65.4		%	45.0		%	50.0		%	57.4		%
Total non-cat loss and ALAE ratio	59.1		%	41.1		%	42.9		%	52.0		%
Total Loss and ALAE ratio	60.7		%	62.0		%	56.4		%	61.1		%
ULAE ratio	6.0		%	6.8		%	3.7		%	6.2		%
Total Loss and LAE ratio	66.7		%	68.8		%	60.1		%	67.3		%
Expense ratio	29.1		%	32.5		%	37.2		%	30.7		%
Combined ratio	95.8		%	101.3		%	97.3		%	98.0		%

The personal insurance segment's net written premiums for the three and nine months ended September 30, 2019 increased 7.4% and 9.8%, respectively, when compared to the same 2018 periods (Tables 1 - 4), primarily driven by new business growth and increased rates in homeowners and other personal. The new business growth resulted in higher levels of policies in force for homeowners for the three and nine months ended September 30, 2019 compared to the same 2018 periods. Partially offsetting the 2019 third quarter net written premium growth was a decrease in personal auto net written premiums primarily driven by a decline in new business and retention when compared to the same 2018 period. In addition, the 2019 year to date increase in personal auto net written premiums was driven by increased rates.

The personal insurance segment's SAP catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 improved 3.2 points and increased 1.1 points, respectively, when compared to the same 2018 periods. The 2019 third quarter catastrophe events were less severe when compared to the same 2018 period, which was impacted by Hurricane Florence.

36

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

The personal insurance segment’s SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 increased 13.1 points and 4.5 points, respectively, when compared to the same 2018 periods (Tables 1 - 4).

The personal auto SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 increased 13.5 points and 2.0 points, respectively, when compared to the same 2018 periods (Tables 1 - 4). The 2019 third quarter reflected 5.9 points less favorable development across multiple coverages including bodily injury as well as adverse development of uninsured and under-insured motorist coverages. The 2019 year to date reflected 2.9 points less favorable development across many of the same coverages including adverse development of property damage claims. The 2018 prior accident year favorable development was primarily attributable to lower than anticipated severity for bodily injury claims from the 2016 and 2017 accident years. The 2019 third quarter current accident year loss ratio increased 7.6 points when compared to the same 2018 period. The 2019 year to date current accident year loss ratio improved 0.9 points when compared to the same 2018 period, primarily attributable to cumulative rate and underwriting actions, as well as improved claim handling efficiency.

The homeowners SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 increased 13.7 points and 10.2 points, respectively, when compared to the same 2018 periods. The 2019 third quarter and year to date current accident year loss ratios increased 11.3 points and 6.0 points, respectively, when compared to the same 2018 periods, attributable to an elevated level of non-cat weather losses including a number of large fire losses due to lightning strikes. The 2019 third quarter and year to date prior accident year losses were minimally impacted by development compared to favorable development of 2.3 points and 3.9 points, respectively, for the same 2018 periods. The 2018 prior accident year favorable development was primarily attributable to favorable emergence on liability claims from multiple accident years.

37

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Commercial Insurance Segment

The following tables set forth certain key performance indicators based on SAP by major product line for our commercial insurance segment for the three and nine months ended September 30, 2019 and 2018:

Table 5

($ in millions)
Three months ended September 30, 2019	Commercial Auto			Small Commercial Package			Middle Market Commercial			Workers' Comp			Farm & Ranch			Other Commercial			Total
Net written premiums	$	27.7		$	30.0		$	39.8		$	23.9		$	11.4		$	4.6		$	137.4
Net earned premiums	23.8			29.9			34.9			21.7			12.4			4.3			127.0
Losses and LAE incurred:
Cat loss and ALAE	0.1			1.1			0.5			—			0.4			—			2.1
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(1.1		)	(4.1		)	(1.2		)	(4.4		)	(0.7		)	(1.6		)	(13.1		)
Current accident year non-cat loss and ALAE	15.2			17.9			19.7			13.9			6.2			3.2			76.1
Total non-cat loss and ALAE	14.1			13.8			18.5			9.5			5.5			1.6			63.0
Total Loss and ALAE	14.2			14.9			19.0			9.5			5.9			1.6			65.1
ULAE	1.6			1.3			2.0			1.8			0.4			0.1			7.2
Total Loss and LAE	15.8			16.2			21.0			11.3			6.3			1.7			72.3
Underwriting expenses	11.9			11.7			15.9			7.2			4.7			2.1			53.5
Net underwriting (loss) gain	$	(3.9	)	$	2.0		$	(2.0	)	$	3.2		$	1.4		$	0.5		$	1.2
Cat loss and ALAE ratio	0.5		%	3.7		%	1.6		%	—		%	3.2		%	—		%	1.7		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(4.6		)%	(13.7		)%	(3.6		)%	(20.1		)%	(5.7		)%	(37.9		)%	(10.4		)%
Current accident year non-cat loss and ALAE ratio	63.8		%	60.1		%	56.3		%	64.2		%	50.0		%	75.9		%	60.0		%
Total non-cat loss and ALAE ratio	59.2		%	46.4		%	52.7		%	44.1		%	44.3		%	38.0		%	49.6		%
Total Loss and ALAE ratio	59.7		%	50.1		%	54.3		%	44.1		%	47.5		%	38.0		%	51.3		%
ULAE ratio	6.7		%	4.2		%	5.7		%	8.3		%	3.2		%	4.1		%	5.7		%
Total Loss and LAE ratio	66.4		%	54.3		%	60.0		%	52.4		%	50.7		%	42.1		%	57.0		%
Expense ratio	43.0		%	39.1		%	40.0		%	30.0		%	41.7		%	42.2		%	38.9		%
Combined ratio	109.4		%	93.4		%	100.0		%	82.4		%	92.4		%	84.3		%	95.9		%

38

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Table 6

($ in millions)
Three months ended September 30, 2018	Commercial Auto			Small Commercial Package			Middle Market Commercial			Workers' Comp			Farm & Ranch			Other Commercial			Total
Net written premiums	$	19.1		$	29.1		$	30.7		$	24.1		$	10.7		$	3.9		$	117.6
Net earned premiums	18.8			30.5			29.4			21.3			11.3			3.9			115.2
Losses and LAE incurred:
Cat loss and ALAE	(0.4		)	2.1			0.5			—			0.8			0.1			3.1
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(1.1		)	(1.8		)	(2.1		)	(2.5		)	(1.0		)	(1.8		)	(10.3		)
Current accident year non-cat loss and ALAE	11.5			18.5			18.7			14.3			6.5			2.3			71.8
Total non-cat loss and ALAE	10.4			16.7			16.6			11.8			5.5			0.5			61.5
Total Loss and ALAE	10.0			18.8			17.1			11.8			6.3			0.6			64.6
ULAE	0.9			1.8			1.6			1.8			0.3			0.2			6.6
Total Loss and LAE	10.9			20.6			18.7			13.6			6.6			0.8			71.2
Underwriting expenses	8.8			12.7			12.5			7.4			5.5			2.3			49.2
Net underwriting (loss) gain	$	(0.9	)	$	(2.8	)	$	(1.8	)	$	0.3		$	(0.8	)	$	0.8		$	(5.2	)
Cat loss and ALAE ratio	(1.8		)%	6.8		%	1.7		%	—		%	7.3		%	2.1		%	2.7		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(5.9		)%	(5.8		)%	(7.3		)%	(12.0		)%	(8.2		)%	(44.6		)%	(8.9		)%
Current accident year non-cat loss and ALAE ratio	60.9		%	60.6		%	63.6		%	67.5		%	57.5		%	60.8		%	62.4		%
Total non-cat loss and ALAE ratio	55.0		%	54.8		%	56.3		%	55.5		%	49.3		%	16.2		%	53.5		%
Total Loss and ALAE ratio	53.2		%	61.6		%	58.0		%	55.5		%	56.6		%	18.3		%	56.2		%
ULAE ratio	5.1		%	5.7		%	5.3		%	8.1		%	2.4		%	6.5		%	5.7		%
Total Loss and LAE ratio	58.3		%	67.3		%	63.3		%	63.6		%	59.0		%	24.8		%	61.9		%
Expense ratio	46.3		%	43.6		%	40.5		%	30.5		%	51.5		%	57.7		%	41.8		%
Combined ratio	104.6		%	110.9		%	103.8		%	94.1		%	110.5		%	82.5		%	103.7		%

39

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Table 7

($ in millions)
Nine months ended September 30, 2019	Commercial Auto			Small Commercial Package			Middle Market Commercial			Workers' Comp			Farm & Ranch			Other Commercial			Total
Net written premiums	$	81.4		$	92.0		$	115.1		$	58.8		$	37.4		$	14.1		$	398.8
Net earned premiums	65.3			88.9			98.1			60.3			36.2			12.6			361.4
Losses and LAE incurred:
Cat loss and ALAE	0.2			6.1			5.7			—			2.5			—			14.5
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(3.6		)	(11.8		)	(7.2		)	(13.4		)	(1.9		)	(1.4		)	(39.3		)
Current accident year non-cat loss and ALAE	41.2			51.3			62.2			42.3			18.0			7.7			222.7
Total non-cat loss and ALAE	37.6			39.5			55.0			28.9			16.1			6.3			183.4
Total Loss and ALAE	37.8			45.6			60.7			28.9			18.6			6.3			197.9
ULAE	4.2			4.8			5.0			5.4			1.5			0.5			21.4
Total Loss and LAE	42.0			50.4			65.7			34.3			20.1			6.8			219.3
Underwriting expenses	33.6			36.0			46.0			20.2			17.4			6.0			159.2
Net underwriting (loss) gain	$	(10.3	)	$	2.5		$	(13.6	)	$	5.8		$	(1.3	)	$	(0.2	)	$	(17.1	)
Cat loss and ALAE ratio	0.4		%	6.9		%	5.8		%	—		%	6.8		%	—		%	4.0		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(5.5		)%	(13.3		)%	(7.4		)%	(22.1		)%	(5.2		)%	(11.2		)%	(10.9		)%
Current accident year non-cat loss and ALAE ratio	62.9		%	57.7		%	63.4		%	70.2		%	49.7		%	61.7		%	61.7		%
Total non-cat loss and ALAE ratio	57.4		%	44.4		%	56.0		%	48.1		%	44.5		%	50.5		%	50.8		%
Total Loss and ALAE ratio	57.8		%	51.3		%	61.8		%	48.1		%	51.3		%	50.5		%	54.8		%
ULAE ratio	6.5		%	5.4		%	5.1		%	8.9		%	4.2		%	4.3		%	5.9		%
Total Loss and LAE ratio	64.3		%	56.7		%	66.9		%	57.0		%	55.5		%	54.8		%	60.7		%
Expense ratio	41.3		%	39.1		%	40.0		%	34.4		%	46.6		%	41.7		%	39.9		%
Combined ratio	105.6		%	95.8		%	106.9		%	91.4		%	102.1		%	96.5		%	100.6		%

40

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Table 8

($ in millions)
Nine months ended September 30, 2018	Commercial Auto			Small Commercial Package			Middle Market Commercial			Workers' Comp			Farm & Ranch			Other Commercial			Total
Net written premiums	$	59.1		$	91.1		$	92.6		$	66.1		$	34.9		$	12.7		$	356.5
Net earned premiums	55.9			91.2			86.7			66.7			33.4			11.8			345.7
Losses and LAE incurred:
Cat loss and ALAE	0.2			9.8			5.8			—			2.4			0.1			18.3
Non-cat loss and ALAE
Prior accident years non-cat loss and ALAE	(5.7		)	(6.5		)	(2.9		)	(8.4		)	(2.2		)	(3.9		)	(29.6		)
Current accident year non-cat loss and ALAE	34.9			55.3			55.9			43.3			17.1			6.0			212.5
Total non-cat loss and ALAE	29.2			48.8			53.0			34.9			14.9			2.1			182.9
Total Loss and ALAE	29.4			58.6			58.8			34.9			17.3			2.2			201.2
ULAE	3.2			4.8			4.6			5.6			1.3			0.8			20.3
Total Loss and LAE	32.6			63.4			63.4			40.5			18.6			3.0			221.5
Underwriting expenses	26.4			40.4			36.1			21.8			15.7			6.1			146.5
Net underwriting (loss) gain	$	(3.1	)	$	(12.6	)	$	(12.8	)	$	4.4		$	(0.9	)	$	2.7		$	(22.3	)
Cat loss and ALAE ratio	0.4		%	10.8		%	6.7		%	—		%	7.3		%	0.6		%	5.3		%
Non-cat loss and ALAE ratio
Prior accident years non-cat loss and ALAE ratio	(10.1		)%	(7.1		)%	(3.3		)%	(12.6		)%	(6.5		)%	(32.9		)%	(8.5		)%
Current accident year non-cat loss and ALAE ratio	62.4		%	60.6		%	64.5		%	64.9		%	51.1		%	51.2		%	61.5		%
Total non-cat loss and ALAE ratio	52.3		%	53.5		%	61.2		%	52.3		%	44.6		%	18.3		%	53.0		%
Total Loss and ALAE ratio	52.7		%	64.3		%	67.9		%	52.3		%	51.9		%	18.9		%	58.3		%
ULAE ratio	5.8		%	5.2		%	5.3		%	8.4		%	3.9		%	6.8		%	5.9		%
Total Loss and LAE ratio	58.5		%	69.5		%	73.2		%	60.7		%	55.8		%	25.7		%	64.2		%
Expense ratio	44.7		%	44.3		%	39.0		%	32.9		%	45.0		%	47.9		%	41.1		%
Combined ratio	103.2		%	113.8		%	112.2		%	93.6		%	100.8		%	73.6		%	105.3		%

The commercial insurance segment's net written premiums for the three and nine months ended September 30, 2019, increased 16.8% and 11.9%, respectively, when compared to the same 2018 periods (Tables 5 - 8), primarily driven by new business growth in commercial auto and middle market commercial. The 2019 year to date improvements were partially offset by a decrease in net written premiums in workers’ compensation due to lower retention on renewal business as a result of the continued intense competition in this market.

The commercial insurance segment's SAP catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 improved 1.0 points and 1.3 points, respectively, when compared to the same 2018 periods (Tables 5 - 8). Catastrophe events for the three and nine months ended September 30, 2019 were less severe when compared to the same 2018 periods.

The commercial insurance segment’s SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 improved 3.9 points and 2.2 points, respectively, when compared to the same 2018 periods (Tables 5 - 8).

The commercial auto SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 increased 4.2 points and 5.1 points, respectively, when compared to the same 2018 periods. The increase in the non-catastrophe loss and ALAE ratio for the 2019 third quarter was primarily driven by elevated bodily injury and uninsured motorist claims in the current accident year when compared to the same 2018 period. The amount of prior accident year development in the 2019 third quarter was consistent with the prior year, although with the growing commercial auto book of business, the increase in the loss ratio had a lesser impact when compared to the same 2018 period. For the 2019 year to date, the increase in the non-catastrophe loss and ALAE ratio was driven by less favorable development of prior accident year losses of 5.5 points compared to 10.1 points

41

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

for the same 2018 period. The 2018 prior accident year favorable development was primarily attributable to lower than anticipated bodily injury severity from the 2016 and 2017 accident years.

The small commercial package SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 improved 8.4 points and 9.1 points, respectively, when compared to the same 2018 periods, primarily driven by greater favorable development of prior accident year losses. The 2019 favorable development was attributable to lower than expected bodily injury severity from multiple accident years. In addition, the 2019 year to date was impacted by a lower level of current accident year property losses when compared to the same 2018 period, which was impacted by weather-related claims and large fire losses.

The middle market commercial SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 improved 3.6 points and 5.2 points, respectively, compared to the same 2018 periods. The 2019 third quarter current accident year improved when compared to the same 2018 period, which was impacted by elevated claim frequency. The 2019 third quarter improvement was partially offset by less favorable development from prior accident year losses when compared to the same 2018 period. The 2019 year to date improvement in the non-catastrophe loss and ALAE ratio was primarily driven by greater favorable development of prior accident year losses due to lower than expected bodily injury claim severity from multiple accident years.

The workers' compensation SAP non-catastrophe loss and ALAE ratios for the three and nine months ended September 30, 2019 improved 11.4 points and 4.2 points, respectively, compared to the same 2018 periods. The 2019 third quarter and year to date were impacted by greater favorable development of prior accident year losses when compared to the same 2018 periods, primarily from lower than anticipated severity. Partially offsetting the 2019 year to date improvement in the non-cat loss and ALAE ratio was a single large loss that occurred in the 2019 second quarter. The 2018 second quarter was impacted by an elevated level of large losses.

42

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Losses and LAE Development

Losses and loss expenses represent the combined estimated ultimate liability for claims occurring in a period, along with any change in the estimated ultimate liability for claims occurring in prior periods.

The following table sets forth a tabular presentation of the development of the prior accident years' ultimate liability by product for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30									Nine months ended September 30
	2019			2018			$ Change			2019			2018			$ Change
	(Redundancy)/Deficiency									(Redundancy)/Deficiency
Non-cat loss and ALAE:
Personal Insurance Segment:
Personal Auto	$	(1.2	)	$	(7.3	)	$	6.1		$	(11.0	)	$	(18.5	)	$	7.5
Homeowners	—			(1.5		)	1.5			0.5			(7.2		)	7.7
Other Personal	(0.9		)	(0.8		)	(0.1		)	(1.9		)	(1.1		)	(0.8		)
Total Personal Insurance Segment	(2.1		)	(9.6		)	7.5			(12.4		)	(26.8		)	14.4
Commercial Insurance Segment:
Commercial Auto	(1.1		)	(1.1		)	—			(3.6		)	(5.7		)	2.1
Small Commercial Package	(4.1		)	(1.8		)	(2.3		)	(11.8		)	(6.5		)	(5.3		)
Middle Market Commercial	(1.2		)	(2.1		)	0.9			(7.2		)	(2.9		)	(4.3		)
Workers' Compensation	(4.4		)	(2.5		)	(1.9		)	(13.4		)	(8.4		)	(5.0		)
Farm & Ranch	(0.7		)	(1.0		)	0.3			(1.9		)	(2.2		)	0.3
Other Commercial	(1.6		)	(1.8		)	0.2			(1.4		)	(3.9		)	2.5
Total Commercial Insurance Segment	(13.1		)	(10.3		)	(2.8		)	(39.3		)	(29.6		)	(9.7		)
Specialty run-off	(0.9		)	1.8			(2.7		)	(2.4		)	4.2			(6.6		)
Cat Loss and ALAE	(1.0		)	0.8			(1.8		)	(0.2		)	1.3			(1.5		)
ULAE	(0.4		)	(2.0		)	1.6			(0.8		)	(6.7		)	5.9
Total	$	(17.5	)	$	(19.3	)	$	1.8		$	(55.1	)	$	(57.6	)	$	2.5

For further information, see the "Personal Insurance Segment" and "Commercial Insurance Segment" discussions included in this Item 2.

43

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Losses and loss expenses payable

The following table sets forth losses and loss expenses payable by major product at September 30, 2019 and December 31, 2018:

 

($ millions)	September 30, 2019		December 31, 2018		$ Change
Personal Insurance Segment:
Personal Auto	$	163.5	$	173.2	$	(9.7	)
Homeowners	70.6		53.2		17.4
Other Personal	15.1		14.1		1.0
Total Personal Insurance Segment	249.2		240.5		8.7
Commercial Insurance Segment:
Commercial Auto	77.4		78.9		(1.5		)
Small Commercial Package	116.9		120.0		(3.1		)
Middle Market Commercial	153.0		147.2		5.8
Workers’ Compensation	194.3		195.4		(1.1		)
Farm & Ranch	15.6		12.9		2.7
Other Commercial	31.8		27.5		4.3
Total Commercial Insurance Segment	589.0		581.9		7.1
Specialty run-off:
E&S Property	24.0		33.1		(9.1		)
E&S Casualty	155.2		186.8		(31.6		)
Programs	68.1		99.0		(30.9		)
Total Specialty run-off	247.3		318.9		(71.6		)
Total losses and loss expenses payable, net of reinsurance  recoverable on losses and loss expenses payable	$	1,085.5	$	1,141.3	$	(55.8	)

Losses and loss expenses payable decreased $55.8 million since December 31, 2018 primarily due to the run-off of specialty business.

We conduct quarterly reviews of loss development and make judgments in determining the reserves for losses and loss expenses. Several factors are considered by us when estimating ultimate liabilities, including consistency in relative case reserve adequacy, consistency in claims settlement practices, recent legal developments, historical data, actuarial projections, exposure changes, anticipated inflation, current business conditions, catastrophe development, late reported claims, and other reasonableness tests.

The risks and uncertainties inherent in our estimates include, but are not limited to, actual settlement experience different from historical data, trends, changes in business and economic conditions, court decisions creating unanticipated liabilities, ongoing interpretation of policy provisions by the courts, inconsistent decisions in lawsuits regarding coverage and additional information discovered before settlement of claims. Our results of operations and financial condition could be impacted, perhaps significantly, in the future if the ultimate payments required for claims settlement vary from the liability currently recorded. For a discussion of our reserving methodologies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Losses and Loss Expenses Payable” in Item 7 of the 2018 Form 10-K.

44

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Acquisition and Operating Expenses

Our GAAP acquisition and operating expenses for the three and nine months ended September 30, 2019 were $109.7 million and $325.2 million, respectively, compared to $110.9 million and $333.0 million, respectively, for the same 2018 periods. The decreases were driven by a decrease in (i) estimated variable compensation, and (ii) consulting spend, primarily information technology related.

Investment Operations Segment

Our investments in fixed maturities, equity securities and certain other invested assets are carried at fair value. The unrealized holding gains or losses of our available-for-sale fixed maturities, net of applicable deferred taxes, are included as a separate component of stockholders’ equity as accumulated other comprehensive income and as such are not included in the determination of net income.

We have investment policy guidelines with respect to purchasing fixed maturity investments for our insurance subsidiaries which preclude investments in bonds that are rated below investment grade by a recognized rating service at the time of purchase. Our fixed maturity portfolio is composed of high quality, investment grade issues, consisting primarily of debt issues rated AAA, AA or A. We obtain investment ratings from major rating services. If there is a split rating, we assign the lowest rating obtained.

For further discussion regarding the management of our investment portfolio, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations – Investment Operations Segment” in Item 7 of the 2018 Form 10-K.

Composition of Investment Portfolio

The following table sets forth the composition of our investment portfolio at carrying value at September 30, 2019 and December 31, 2018:

 

($ millions)	September 30, 2019		% of Total		December 31, 2018		% of Total
Cash and cash equivalents	$	38.3	1.4	%	$	59.8	2.2	%
Fixed maturities, at fair value:
Fixed maturities	2,054.0		74.9	%	2,017.1		75.9	%
Treasury inflation-protected securities	135.3		4.9	%	142.4		5.4	%
Total fixed maturities	2,189.3		79.8	%	2,159.5		81.3	%
Notes receivable from affiliate	70.0		2.6	%	70.0		2.6	%
Equity securities:
Large-cap securities	99.1		3.6	%	77.2		2.9	%
Mutual and exchange traded funds	274.2		10.0	%	237.8		8.9	%
Total equity securities	373.3		13.6	%	315.0		11.8	%
Other invested assets:
International funds	51.7		1.9	%	38.5		1.5	%
Other invested assets	12.9		0.5	%	10.3		0.4	%
Total other invested assets	64.6		2.4	%	48.8		1.9	%
Other invested assets, at cost	6.5		0.2	%	5.6		0.2	%
Total portfolio	$	2,742.0	100.0	%	$	2,658.7	100.0	%

45

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturities by contractual maturity at September 30, 2019:

 

($ millions)	Amortized cost		Fair value
Due in 1 year or less	$	55.7	$	56.6
Due after 1 year through 5 years	562.7		569.4
Due after 5 years through 10 years	239.9		249.7
Due after 10 years	565.7		593.5
U.S. government agencies mortgage-backed securities	705.0		720.1
Total	$	2,129.0	$	2,189.3

Expected maturities may differ from contractual maturities as the issuers may have the right to call or prepay the obligations with or without call or prepayment penalties. The duration of the fixed maturity portfolio was approximately 3.63 and 4.23 as of September 30, 2019, and December 31, 2018, respectively.

46

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Investment Operations Revenue

The following table sets forth the components of net investment income for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Gross investment income:
Fixed maturities	$	15.3		$	16.4		$	47.7		$	49.4
Equity securities	3.0			3.0			8.9			8.6
Other	1.1			1.7			4.2			5.2
Total gross investment income	19.4			21.1			60.8			63.2
Less: Investment expenses	0.1			0.3			0.4			1.0
Net investment income	$	19.3		$	20.8		$	60.4		$	62.2
Average invested assets (at cost)	$	2,638.0		$	2,692.3		$	2,648.4		$	2,672.1
Annualized investment yield	2.9		%	3.1		%	3.0		%	3.1		%
Annualized investment yield, after tax	2.4		%	2.5		%	2.5		%	2.5		%
Net investment income, after tax	$	16.0		$	17.0		$	49.8		$	50.9
Effective tax rate	9.4		%	18.5		%	17.9		%	18.2		%

The following table sets forth realized gains (losses) and the proceeds received from the sale of our investment portfolio for the three and nine months ended September 30, 2019 and 2018:

($ in millions)	Three months ended September 30									Nine months ended September 30
	2019					2018				2019					2018
	Realized gains (losses)			Proceeds received on sale		Realized gains (losses)		Proceeds received on sale		Realized gains (losses)			Proceeds received on sale		Realized gains (losses)			Proceeds received on sale
Realized gains:
Fixed maturities	$	1.2		$	50.0	$	—	$	8.8	$	2.8		$	248.7	$	1.7		$	69.7
Equity securities	0.2			4.1		1.0		7.3		1.7			14.3		6.0			83.0
Total realized gains	1.4			54.1		1.0		16.1		4.5			263.0		7.7			152.7
Realized losses:
Equity securities	(2.0		)	10.0		—		0.1		(4.2		)	20.1		(0.6		)	6.3
Other invested assets	—			0.4		—		0.2		—			1.0		—			0.9
Total realized losses	(2.0		)	10.4		—		0.3		(4.2		)	21.1		(0.6		)	7.2
Net realized (losses) gains on investments	$	(0.6	)	$	64.5	$	1.0	$	16.4	$	0.3		$	284.1	$	7.1		$	159.9

When a fixed maturity security has been determined to have an other-than-temporary decline in fair value, the impairment charge is separated into an amount representing the credit loss, which is recognized in earnings, and the amount related to non-credit factors, which is recognized in accumulated other comprehensive income. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies – Investments” included in Item 7 of the 2018 Form 10-K for other-than-temporary impairment (“OTTI”) indicators. Future increases or decreases in fair value, if not other-than-temporary, are included in accumulated other comprehensive income.

47

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Gross Unrealized Investment Gains and Losses

Based upon our review of our investment portfolio at September 30, 2019, we determined that there were no individual investments with an unrealized holding loss that had a fair value significantly below cost continually for more than one year. The following table sets forth detailed information on our investment portfolio by lot at fair value for our gross unrealized holding gains (losses) at September 30, 2019:

($ millions, except # of positions)	Cost or amortized cost		Gross unrealized holding gains		Number of gain positions	Gross unrealized holding losses			Number of loss positions	Fair value
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	516.4	$	14.8	40	$	(1.2	)	25	$	530.0
Obligations of states and political subdivisions	415.3		21.8		89	—			1	437.1
Corporate securities	492.3		10.9		58	(1.1		)	11	502.1
U.S. government agencies mortgage-backed securities	705.0		18.2		63	(3.1		)	42	720.1
Total available-for-sale fixed maturities	$	2,129.0	$	65.7	250	$	(5.4	)	79	$	2,189.3

The following table sets forth our unrealized holding gains by investment type, net of deferred tax that was included as a component of accumulated other comprehensive income at September 30, 2019, and December 31, 2018, and the change in unrealized holding gains, net of deferred tax, for the nine months ended September 30, 2019:

($ millions)	September 30, 2019			December 31, 2018			$ Change
Available-for-sale investments:
Unrealized holding gains (losses):
Fixed maturities	$	60.3		$	(28.7	)	$	89.0
Net deferred federal income tax	(12.6		)	6.1			(18.7		)
Unrealized gains (losses), net of tax	$	47.7		$	(22.6	)	$	70.3

Fair Value Measurements

We primarily use one independent nationally recognized third party pricing service in developing fair value estimates. We obtain one price per security, and our processes and control procedures are designed to ensure the value is accurately recorded on an unadjusted basis. Through discussions with the pricing service, we gain an understanding of the methodologies used to price the different types of securities, that the data and the valuation methods utilized are appropriate and consistently applied, and that the assumptions are reasonable and representative of fair value. To validate the reasonableness of the valuations obtained from the pricing service, we compare to other fair value pricing information gathered from other independent pricing sources. See Note 3, “Fair Value of Financial Instruments” to our condensed consolidated financial statements included in Item 1 of this Form 10-Q for a presentation of our available-for-sale investments within the fair value hierarchy at September 30, 2019, and December 31, 2018.

48

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Other Items

Income Taxes

The following table sets forth the components of our federal income tax expense for the three and nine months ended September 30, 2019 and 2018, respectively.

 

($ millions)	Three months ended September 30					Nine months ended September 30
	2019		2018			2019			2018
Income before federal income taxes	$	12.7	$	41.0		$	66.7		$	45.4
Federal income tax expense (benefit)
Current	—		(0.1		)	(0.4		)	(1.1		)
Deferred	1.2		7.7			12.4			9.2
Total federal income tax expense	1.2		7.6			12.0			8.1
Net income	$	11.5	$	33.4		$	54.7		$	37.3

The effective tax rates for the three and nine months ended September 30, 2019, were 9.4% and 17.9%, respectively, compared to 18.6% and 17.8%, respectively, for the same 2018 periods.

For additional information, see Note 6 of our condensed consolidated financial statements included in Item 1 of this Form 10-Q.

49

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

LIQUIDITY AND CAPITAL RESOURCES

General

Liquidity refers to our ability to generate adequate amounts of cash to meet our short- and long-term needs. Our primary sources of cash are premiums, investment income, investment sales and the maturity of fixed income security investments. The significant outflows of cash are payments of claims, commissions, premium taxes, operating expenses, income taxes, dividends, interest and principal payments on debt and investment purchases. The cash outflows may vary due to uncertainties regarding settlement of large losses or catastrophic events. As a result, we continually monitor our investment and reinsurance programs to ensure they are appropriately structured to enable the insurance subsidiaries to meet anticipated short-term and long-term cash requirements without the need to sell investments to meet fluctuations in claim payments.

Liquidity

Our insurance subsidiaries must have adequate liquidity to ensure that their cash obligations are met. However, as discussed below, the STFC Pooled Companies do not have the day-to-day liquidity concerns normally associated with an insurance company due to their participation in, and the terms of, the Pooling Arrangement. In addition, State Auto P&C’s $100.0 million FHLB Line of Credit is available for general corporate purposes such as funding liquidity needs.  See “Borrowing Arrangements - FHLB Line of Credit” included in this Item 2.

Under the terms of the Pooling Arrangement, State Auto Mutual receives all premiums and pays all losses and expenses associated with the insurance business produced by the STFC Pooled Companies and the other pool participants, and then it settles the intercompany balances generated by these transactions with the pool participants within 60 days following each quarter end. We believe this provides State Auto Mutual with sufficient liquidity to pay losses and expenses of our insurance operations on a timely basis. When settling the intercompany balances, State Auto Mutual provides the pool participants with full credit for the premiums written net of losses paid during the quarter, retaining all receivable amounts from insureds and agents and reinsurance recoverable on paid losses from unaffiliated reinsurers. Any receivable amounts that are ultimately deemed to be uncollectible are charged-off by State Auto Mutual and allocated to the pool participant on the basis of its pooling percentage.

As a result of the Pooling Arrangement, we have an off-balance sheet credit risk related to the balances due to State Auto Mutual from insureds, agents and reinsurers, which are offset by the unearned premiums from the respective policies. While the total amount due to State Auto Mutual from policyholders and agents is significant, the individual amounts due are relatively small at the policyholder and agency level. Based on historical data, this credit risk exposure is not considered to be material to our financial position, though the impact to income on a quarterly basis may be material. The State Auto Group mitigates its exposure to this credit risk through its in-house collections unit for both personal and commercial accounts which is supplemented by third party collection service providers. The amounts deemed uncollectible by State Auto Mutual and allocated to the STFC Pooled Companies are included in the other expenses line item in the accompanying consolidated statements of income.

We generally manage our cash flows through current operational activity and maturing investments, without a need to liquidate any of our other investments; however, should our written premiums decline or paid losses increase significantly, or a combination thereof, we may need to liquidate investments at losses in order to meet our cash obligations. This action was not necessary for the three and nine months ended September 30, 2019.

We maintain a portion of our investment portfolio in relatively short-term and highly liquid investments to ensure the immediate availability of funds to pay claims and expenses. At September 30, 2019, and December 31, 2018, we had $38.3 million and $59.8 million, respectively, in cash and cash equivalents, and $2,627.2 million and $2,523.3 million, respectively, of total investments. Our available-for-sale fixed maturities included $9.3 million and $8.9 million of securities on deposit with insurance regulators as required by law at September 30, 2019, and December 31, 2018; in addition, substantially all of our fixed maturity and equity securities are traded on public markets. For a further discussion regarding investments, see “Investments Operations Segment” included in this Item 2.

In May 2009, we entered into two separate credit agreements with State Auto Mutual pursuant to which we loaned State Auto Mutual a total of $70.0 million. In May 2019, we refinanced the two credit agreements with State Auto Mutual at a fixed annual interest rate of 4.05% (the prior fixed annual interest rate was 7.00%), with interest payable semi-annually and principal payable in May 2029.

Cash used in operating activities was $43.9 million compared to $30.3 million for the nine months ended September 30, 2019 and 2018, respectively. Net cash from operations will vary from period to period if there are significant changes in underwriting results, primarily the level of premiums written or loss and loss expenses paid, and in cash flows from investment income or federal income taxes paid.

Cash provided by investing activities was $31.1 million and cash used in investing activities was $10.0 million for the nine months ended September 30, 2019 and 2018, respectively. The change was primarily driven by increases in the proceeds from the sales and maturities of fixed maturities partially offset by an increase in the purchases of fixed maturities.

Cash used in financing activities was $8.7 million and $1.7 million for the nine months ended September 30, 2019 and 2018, respectively. The change was primarily driven by a decrease in stock option exercises in the first nine months of 2019 compared to the same 2018 period.

Borrowing Arrangements

FHLB Line of Credit

State Auto P&C has an Open Line of Credit Commitment (the "OLC") with the FHLB that provides State Auto P&C with a $100.0 million open line of credit available for general corporate purposes. The OLC matures in April 2020. Draws under the OLC are to be funded at a daily variable rate advance with a term of no more than 180 days with interest payable monthly. All advances under the OLC are to be fully secured by a pledge of specific investment securities of State Auto P&C. As of September 30, 2019, no advances had been made under the OLC.

FHLB Loans

State Auto P&C has outstanding two term loans with the FHLB in the principal amounts of $21.5 million and $85.0 million, respectively (the “2016 FHLB Loan” and "2018 FHLB Loan", respectively). The 2016 FHLB Loan matures in September 2021 and may be prepaid without penalty. The 2016 FHLB Loan provides for interest-only payments during its term, with principal due in full at maturity. The interest rate is fixed over the term of the loan at 1.73%. The 2018 FHLB Loan matures in May 2033 and provides for interest-only payments during its term, with principal due in full at maturity. The interest rate is fixed over the term of the loan at 3.96%. Prepayment of the 2018 FHLB Loan would require a prepayment fee.

The 2016 and 2018 FHLB Loans are fully secured by a pledge of specific investment securities of State Auto P&C.

Subordinated Debentures

State Auto Financial’s Delaware business trust subsidiary (the “Capital Trust”) has outstanding $15.0 million liquidation amount of capital securities, due 2033. In connection with the Capital Trust’s issuance of the capital securities and the related purchase by State Auto Financial of all of the Capital Trust’s common securities (liquidation amount of $0.5 million), State Auto Financial has issued to the Capital Trust $15.5 million aggregate principal amount of unsecured Floating Rate Junior Subordinated Debt Securities due 2033 (the “Subordinated Debentures”). The sole assets of the Capital Trust are the Subordinated Debentures and any interest accrued thereon. Interest on the Capital Trust’s capital and common securities is payable quarterly at a rate equal to the three-month LIBOR rate plus 4.20%, adjusted quarterly. The applicable interest rates for September 30, 2019, and 2018 were 6.33% and 6.52%, respectively.

Reinsurance Arrangements

Members of the State Auto Group follow the customary industry practice of reinsuring a portion of their exposures and paying to the reinsurers a portion of the premiums received. Insurance is ceded principally to reduce net liability on individual risks or for individual loss occurrences, including catastrophic losses. Although reinsurance does not legally discharge the individual members of the State Auto Group from primary liability for the full amount of limits applicable under their policies, it does make the assuming reinsurer liable to the extent of the reinsurance ceded.

To minimize the risk of reinsurer default, the State Auto Group cedes only to third-party reinsurers who are rated A- or better by A.M. Best or Standard & Poor’s and also utilizes both domestic and international markets to diversify its credit risk. We utilize reinsurance to limit our loss exposure and contribute to our liquidity and capital resources.

Other Reinsurance Arrangements

Each member of the State Auto Group is party to working reinsurance treaties for casualty, workers’ compensation and property lines with several reinsurers arranged through reinsurance intermediaries. These agreements are described in more detail below. We have also secured other reinsurance to limit the net cost of large loss events for certain types of coverage. The State Auto Group also makes use of facultative reinsurance for unique risk situations. The State Auto Group also participates in state insurance pools and associations. In general, these pools and associations are state sponsored and/or operated, impose mandatory participation by insurers doing business in that state, and offer coverage for hard-to-place risks at rates established by the state sponsor or operator, thereby transferring risk of loss to the participating insurers in exchange for premiums which may not be commensurate with the risk assumed.

Adverse Development Cover

The State Auto Group has an adverse development reinsurance agreement implemented at the end of 2014, providing $40.0 million of coverage for adverse claims development in excess of carried reserves as of November 30, 2014 for the terminated restaurant program business previously underwritten by a MGU-subsidiary of State Auto Mutual.

Property Catastrophe Treaty

Members of the State Auto Group maintain a property catastrophe excess of loss reinsurance agreement, covering property catastrophe related events affecting at least two risks. This property catastrophe reinsurance agreement renewed as of July 1, 2019. Under this reinsurance agreement, we retain the first $75.0 million of catastrophe loss, each occurrence, with a 5.0% co-participation on the next $125.0 million of covered loss, each occurrence. The reinsurers are responsible for 95.0% of the catastrophe losses excess of $75.0 million up to $200.0 million, each occurrence. The State Auto Group is responsible for catastrophe losses above $200.0 million. There is also an automatic restatement of the limit, for 125% of the deposit premium.

Property Per Risk Treaty

As of July 1, 2019, the State Auto Group renewed the property per risk excess of loss reinsurance agreement. This reinsurance agreement provides individual property risk coverage for the State Auto Group for losses exceeding $4.0 million. The reinsurers are responsible for 100.0% of the loss excess of the $4.0 million retention for property business up to $20.0 million of covered loss.

Casualty and Workers' Compensation Treaties

As of July 1, 2019, the State Auto Group renewed the casualty excess of loss reinsurance agreement. Under this reinsurance agreement, the State Auto Group is responsible for the first $3.0 million of losses that involve workers' compensation, auto liability, other liability and umbrella liability policies. This reinsurance agreement provides coverage up to $10.0 million, except for commercial umbrella policies which are covered for limits up to $15.0 million.

Also, certain unusual claim situations involving extra contractual obligations, excess of policy limits, LAE coverage and multiple policy or coverage loss occurrences arising from bodily injury liability, property damage, uninsured motorist and personal injury protection are covered by a Clash reinsurance agreement that provides for $20.0 million of coverage in excess of $10.0 million retention for each loss occurrence. This Clash reinsurance coverage sits above the $7.0 million excess of $3.0 million arrangement.

In addition, each company in the State Auto Group is party to a workers’ compensation catastrophe insurance agreement that provides additional reinsurance coverage for workers’ compensation losses involving multiple workers. Subject to $10.0

50

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

million of retention, reinsurers are responsible for 100.0% of the excess over $10.0 million up to $30.0 million of covered loss. For loss amounts over $30.0 million, the casualty excess of loss reinsurance agreement provides $20.0 million coverage in excess of $30.0 million. Workers’ compensation catastrophe coverage is subject to a “Maximum Any One Life” limitation of $10.0 million. This limitation means that losses associated with each worker may contribute no more than $10.0 million to covered loss under these agreements.

Oil & Gas Quota Share

Effective March 1, 2018, the State Auto Group entered into a quota share agreement ("Oil & Gas Quota Share") covering its gas & propane distribution book of business. The Oil & Gas Quota Share expired February 28, 2019 on a run-off basis.

Regulatory Considerations

At September 30, 2019, all of our insurance subsidiaries were in compliance with statutory requirements relating to capital adequacy.

ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS

Leases

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" that amended previous guidance on lease accounting. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance became effective January 1, 2019 and did not have a material impact on our results of operations, consolidated financial position or cash flows. As permitted by the guidance, we elected the practical expedients contained in ASC 842-10-65-1(f) and therefore did not reassess the lease classification of our existing leases.

CREDIT AND FINANCIAL STRENGTH RATINGS

On June 20, 2019, A.M. Best reaffirmed the State Auto Group’s financial strength rating of A- (Excellent) with a stable outlook.

MARKET RISK

With respect to Market Risk, see the discussion regarding this subject at “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Investment Operations Segment – Market Risk” in Item 7 of the 2018 Form 10-K. There have been no material changes from the information reported regarding Market Risk in the 2018 Form 10-K.

51

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Item 3. Quantitative and Qualitative Disclosure of Market Risk

The information called for by this item is provided in this Form 10-Q under the caption “Market Risk” under Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.

52

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Item 4. Controls and Procedures

Disclosure Controls and Procedures

With the participation of our principal executive officer and principal financial officer, our management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer have concluded that, as of the end of the period covered by this report:

1. Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission;

2. Information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure; and

3. Our disclosure controls and procedures are effective in timely making known to them material information required to be included in our periodic filings with the Securities and Exchange Commission.

Changes in Internal Control over Financial Reporting

There has been no change in our internal controls over financial reporting that occurred during the most recent fiscal quarter that has materially affected, nor is it likely to materially affect, our internal control over financial reporting.

53

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in the 2018 Form 10-K under Part I, Item 1A – Risk Factors.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

54

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

Item 6. Exhibits

Exhibit No.	Description of Exhibits
31.01	CEO certification required by Section 302 of Sarbanes Oxley Act of 2002
31.02	CFO certification required by Section 302 of Sarbanes Oxley Act of 2002
32.01	CEO certification required by Section 906 of Sarbanes Oxley Act of 2002
32.02	CFO certification required by Section 906 of Sarbanes Oxley Act of 2002
101.INS	The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document

55

STATE AUTO FINANCIAL CORPORATION AND SUBSIDIARIES

(a majority-owned subsidiary of State Automobile Mutual Insurance Company)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	State Auto Financial Corporation
Date: November 1, 2019	/s/ Steven E. English
	Steven E. English
	Chief Financial Officer
	(Duly Authorized Officer and
	Principal Financial Officer)

56

EX-31.01

Exhibit 31.01

CERTIFICATION

I, Michael E. LaRocco, certify that:

1.    I have reviewed this Form 10-Q of State Auto Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019	/s/ Michael E. LaRocco
	Michael E. LaRocco, Chief Executive Officer
	(Principal executive officer)

EX-31.02

Exhibit 31.02

CERTIFICATION

I, Steven E. English, certify that:

1.    I have reviewed this Form 10-Q of State Auto Financial Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019	/s/ Steven E. English
	Steven E. English, Chief Financial Officer
	(Principal financial officer)

EX-32.01

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of State Auto Financial Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael E. LaRocco, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Michael E. LaRocco

Michael E. LaRocco

Chief Executive Officer

November 1, 2019

A signed original of this written statement required by Section 906 has been provided to State Auto Financial Corporation and will be retained by State Auto Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.02

Exhibit 32.02

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of State Auto Financial Corporation (the “Company”) on Form 10-Q for the period ending September 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven E. English, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Steven E. English

Steven E. English

Chief Financial Officer

November 1, 2019

A signed original of this written statement required by Section 906 has been provided to State Auto Financial Corporation and will be retained by State Auto Financial Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Cash Flows [Abstract]
Interest Expense Debt To Affiliates	$ 0.2	$ 0.2	$ 0.7	$ 0.7

XML

Reinsurance - Summary of External Reinsurance Transactions, as well as reinsurance transactions with State Auto Mutual Under the Pooling Arrangement (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Premiums earned:
Assumed from external insurers and reinsurers	$ 21.0	$ 17.3	$ 59.3	$ 41.9
Assumed under Pooling Arrangement	319.6	306.8	930.0	929.2
Ceded to external insurers and reinsurers	(6.6)	(5.9)	(18.8)	(16.7)
Ceded under Pooling Arrangement	(263.9)	(234.9)	(761.5)	(678.1)
Net assumed premiums earned	70.1	83.3	209.0	276.3
Losses and loss expenses incurred:
Assumed from external insurers and reinsurers	14.6	10.9	45.6	34.2
Assumed under Pooling Arrangement	209.3	191.4	639.4	622.3
Ceded to external insurers and reinsurers	(0.6)	(1.9)	(6.2)	(3.4)
Ceded under Pooling Arrangement	(185.1)	(148.4)	(514.3)	(486.0)
Net assumed losses and loss expenses incurred	$ 38.2	$ 52.0	$ 164.5	$ 167.1

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 25, 2019
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2019
Document Transition Report	false
Entity File Number	000-19289
Entity Registrant Name	STATE AUTO FINANCIAL CORPORATION
Entity Central Index Key	0000874977
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Incorporation, State or Country Code	OH
Entity Tax Identification Number	31-1324304
Entity Address, Address Line One	518 East Broad Street
Entity Address, State or Province	OH
Entity Address, City or Town	Columbus
Entity Address, Postal Zip Code	43215-3976
City Area Code	614
Local Phone Number	464-5000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding (shares)		43,563,019
NASDAQ/NGS (GLOBAL SELECT MARKET) [Member]
Entity Information [Line Items]
Title of 12(b) Security	Common shares, without par value
Trading Symbol	STFC
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Earned premiums, from affiliates	$ 55.7	$ 71.9	$ 168.5	$ 251.1
Net investment income, from affiliate	0.7	1.3	2.3	3.7
Losses and loss expenses, from affiliates	24.2	43.0	125.1	136.3
Net Acquisition and Operating Expenses, from affiliates	17.6	(26.8)	54.5	52.3
Interest Expense Debt To Affiliates	$ 0.2	$ 0.2	$ 0.7	$ 0.7

XML

Pension and Postretirement Benefit Plans - Additional Information (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($)
Retirement Benefits [Abstract]
Contributions by employer	$ 10.0

XML

Other Comprehensive Income and Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income by Component, Net of Tax

The following tables set forth the changes in the Company’s accumulated other comprehensive (loss) income ("AOC(L)I"), net of tax, for the three and nine months ended September 30, 2019 and 2018:

($ millions)		Unrealized Gains and Losses on Available-for-Sale  Securities			Benefit Plan Items			Total
Beginning balance at July 1, 2019		$	33.2		$	(74.9	)	$	(41.7	)
Other comprehensive income before reclassifications		17.8			—			17.8
Amounts reclassified from AOCI (a)		(0.9		)	0.6			(0.3		)
Net current period other comprehensive income		16.9			0.6			17.5
Ending balance at September 30, 2019		$	50.1		$	(74.3	)	$	(24.2	)
Beginning balance at July 1, 2018		$	(20.3	)	$	(75.5	)	$	(95.8	)
Other comprehensive loss before reclassifications		(11.6		)	—			(11.6		)
Amounts reclassified from AOCI (a)		—			1.3			1.3
Net current period other comprehensive (loss) income		(11.6		)	1.3			(10.3		)
Ending balance at September 30, 2018		$	(31.9	)	$	(74.2	)	$	(106.1	)
(a)	See separate table below for details about these reclassifications

($ millions)		Unrealized Gains and Losses on Available-for-Sale  Securities			Benefit Plan Items			Total
Beginning balance at January 1, 2019		$	(20.2	)	$	(76.2	)	$	(96.4	)
Other comprehensive income before reclassifications		72.5			—			72.5
Amounts reclassified from AOCI (a)		(2.2		)	1.9			(0.3		)
Net current period other comprehensive income		70.3			1.9			72.2
Ending balance at September 30, 2019		$	50.1		$	(74.3	)	$	(24.2	)
Beginning balance at January 1, 2018		$	66.0		$	(62.2	)	$	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		(47.9		)	(16.0		)	(63.9		)
Other comprehensive loss before reclassifications		(48.7		)	—			(48.7		)
Amounts reclassified from AOCI (a)		(1.3		)	4.0			2.7
Net current period other comprehensive (loss) income		(50.0		)	4.0			(46.0		)
Ending balance at September 30, 2018		$	(31.9	)	$	(74.2	)	$	(106.1	)
(a)	See separate table below for details about these reclassifications

Schedule of Reclassifications Out of Accumulated Other Comprehensive Income by Component

The following tables set forth the reclassifications out of accumulated other comprehensive income, by component, to the Company’s condensed consolidated statement of income for the three and nine months ended September 30, 2019 and 2018:

($ millions)
Details about Accumulated Other		Three months ended September 30						Affected line item in the Condensed
Comprehensive Income Components								Consolidated Statements of Income
		2019			2018
Unrealized gains on available-for-sale fixed maturity investments		$	1.2		$	—		Realized gains on sale of securities
		1.2			—			Total before tax
		(0.3		)	—			Tax expense
		0.9			—			Net of tax
Amortization of benefit plan items
Negative prior service cost		1.6			1.6			(b)
Net actuarial loss		(2.4		)	(3.3		)	(b)
		(0.8		)	(1.7		)	Total before tax
		0.2			0.4			Tax benefit
		(0.6		)	(1.3		)	Net of tax
Total reclassifications for the period		$	0.3		$	(1.3	)
(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).

($ millions)
Details about Accumulated Other		Nine months ended September 30						Affected line item in the Condensed
Comprehensive Income Components								Consolidated Statements of Income
		2019			2018
Unrealized gains on available-for-sale fixed maturity investments		$	2.8		$	1.7		Realized gain on sale of securities
		2.8			1.7			Total before tax
		(0.6		)	(0.4		)	Tax expense
		2.2			1.3			Net of tax
Amortization of benefit plan items
Negative prior service cost		4.8			4.8			(b)
Net actuarial loss		(7.2		)	(9.9		)	(b)
		(2.4		)	(5.1		)	Total before tax
		0.5			1.1			Tax benefit
		(1.9		)	(4.0		)	Net of tax
Total reclassifications for the period		$	0.3		$	(2.7	)
(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).

XML

Losses and Loss Expenses Payable Losses and Loss Expenses Payable (Tables)

9 Months Ended

Sep. 30, 2019

Losses and Loss Expenses Payable [Abstract]

Schedule Of Activity In Liability For Unpaid Losses And Loss Adjustment Expenses Table [Table Text Block]

($ millions)	2019			2018
Losses and loss expenses payable, at beginning of period	$	1,146.8		$	1,255.6
Less: reinsurance recoverable on losses and loss expenses payable	5.5			3.1
Net balance at beginning of period	1,141.3			1,252.5
Incurred related to:
Current year	692.7			678.7
Prior years	(55.1		)	(57.6		)
Total incurred	637.6			621.1
Paid related to:
Current year	366.4			314.1
Prior years	327.0			365.8
Total paid	693.4			679.9
Net balance at end of period	1,085.5			1,193.7
Plus: reinsurance recoverable on losses and loss expenses payable	7.2			5.0
Losses and loss expenses payable, at end of period	$	1,092.7		$	1,198.7

XML

Investments - Amortized Cost and Fair Value of Available-for-Sale Fixed Maturities by Contractual Maturity (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Amortized cost
Due in 1 year or less, Amortized cost	$ 55.7
Due after 1 year through 5 years, Amortized cost	562.7
Due after 5 years through 10 years, Amortized cost	239.9
Due after 10 years, Amortized cost	565.7
U.S. government agencies mortgage-backed securities, Amortized cost	705.0
Total, Amortized cost	2,129.0	$ 2,188.2
Fair value
Due in 1 year or less, Fair value	56.6
Due after 1 year through 5 years, Fair value	569.4
Due after 5 years through 10 years, Fair value	249.7
Due after 10 years, Fair value	593.5
U.S. government agencies mortgage-backed securities, Fair value	720.1
Total, Fair value	$ 2,189.3	$ 2,159.5

XML

Fair Value of Financial Instruments - Company's Available-for-Sale Investments within Fair Value Hierarchy (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	$ 2,189.3	$ 2,159.5
Investments, Fair Value Disclosure	2,575.5	2,484.8
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	530.0	432.4
Investments, Fair Value Disclosure	530.0	432.4
Obligations of States and Political Subdivisions [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	437.1	414.6
Investments, Fair Value Disclosure	437.1	414.6
Corporate Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	502.1	540.6
Investments, Fair Value Disclosure	502.1	540.6
U.S. Government Agencies Mortgage-Backed Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	720.1	771.9
Investments, Fair Value Disclosure	720.1	771.9
Fixed Maturities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments, Fair Value Disclosure	2,189.3	2,159.5
Large-Cap Equity Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments, Fair Value Disclosure	99.1	77.2
Mutual and exchange traded funds [Domain] [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments, Fair Value Disclosure	274.2	237.8
Equity Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments, Fair Value Disclosure	373.3	315.0
Other Invested Assets [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Investments, Fair Value Disclosure	12.9	10.3
Level 1 [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	386.2	325.3
Level 1 [Member] | U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 1 [Member] | Obligations of States and Political Subdivisions [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 1 [Member] | Corporate Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 1 [Member] | U.S. Government Agencies Mortgage-Backed Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 1 [Member] | Fixed Maturities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 1 [Member] | Large-Cap Equity Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	99.1	77.2
Level 1 [Member] | Mutual and exchange traded funds [Domain] [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	274.2	237.8
Level 1 [Member] | Equity Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	373.3	315.0
Level 1 [Member] | Other Invested Assets [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	12.9	10.3
Level 2 [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	2,189.3	2,159.5
Level 2 [Member] | U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	530.0	432.4
Level 2 [Member] | Obligations of States and Political Subdivisions [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	437.1	414.6
Level 2 [Member] | Corporate Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	502.1	540.6
Level 2 [Member] | U.S. Government Agencies Mortgage-Backed Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	720.1	771.9
Level 2 [Member] | Fixed Maturities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	2,189.3	2,159.5
Level 2 [Member] | Large-Cap Equity Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 2 [Member] | Mutual and exchange traded funds [Domain] [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 2 [Member] | Equity Securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	0.0	0.0
Level 2 [Member] | Other Invested Assets [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Fair value	$ 0.0	$ 0.0

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Segment Information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company changed its reportable segments from four to three effective January 1, 2019. The exit from the specialty insurance business resulted in the elimination of specialty insurance as a reportable segment as it no longer is material to the Company's results and is disclosed as "specialty run-off." The three remaining reportable segments are: personal insurance, commercial insurance, and investment operations. The reportable insurance segments are business units managed separately because of the differences in the type of customers they serve, the products they provide or services they offer. The insurance segments market a broad line of property and casualty insurance products throughout the United States through independent insurance agencies, which include retail agents and wholesale brokers. The investment operations segment, managed by Stateco, provides investment services.

The Company evaluates the performance of its insurance segments using industry financial measurements based on Statutory Accounting Practices (“SAP”), which include loss and loss adjustment expense ratios, underwriting expense ratios, combined ratios, statutory underwriting gain (loss), net premiums earned and net written premiums. One of the most significant differences between SAP and GAAP is that SAP requires all underwriting expenses to be expensed immediately and not deferred and amortized over the same period the premium is earned.

The investment operations segment is evaluated based on investment returns of assets managed by Stateco. Asset information by segment is not reported for the insurance segments because the Company does not produce such information internally.

The following table sets forth financial information regarding the Company’s reportable segments and specialty run-off for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Revenue from external sources:
Insurance operations
Personal insurance	$	192.7		$	173.0		$	562.5		$	494.2
Commercial insurance	127.0			115.2			361.4			345.7
Specialty run-off	(0.1		)	18.6			6.1			89.3
Total insurance operations	319.6			306.8			930.0			929.2
Investment operations
Net investment income	19.3			20.8			60.4			62.2
Net investment (loss) gain	(5.0		)	17.8			50.2			18.2
Total investment operations	14.3			38.6			110.6			80.4
All other	0.6			0.6			1.6			1.8
Total revenue from external sources	334.5			346.0			1,042.2			1,011.4
Intersegment revenue	1.7			1.6			4.9			4.8
Total revenue	336.2			347.6			1,047.1			1,016.2
Reconciling items:
Eliminate intersegment revenue	(1.7		)	(1.6		)	(4.9		)	(4.8		)
Total consolidated revenues	$	334.5		$	346.0		$	1,042.2		$	1,011.4
Segment (loss) income before federal income tax:
Insurance operations SAP underwriting (loss) gain
Personal insurance	$	(6.3	)	$	6.9		$	(32.0	)	$	(4.6	)
Commercial insurance	1.2			(5.2		)	(17.1		)	(22.3		)
Specialty run-off	(0.6		)	1.9			(1.3		)	4.5
Total insurance operations	(5.7		)	3.6			(50.4		)	(22.4		)
Investment operations
Net investment income	19.3			20.8			60.4			62.2
Net investment (loss) gain	(5.0		)	17.8			50.2			18.2
Total investment operations	14.3			38.6			110.6			80.4
All other	—			0.1			0.2			0.3
Total segment income before reconciling items	8.6			42.3			60.4			58.3
Reconciling items:
GAAP expense adjustments	7.2			0.8			17.3			(2.6		)
Interest expense on corporate debt	(1.2		)	(1.2		)	(3.7		)	(4.5		)
Corporate expenses	(1.9		)	(0.9		)	(7.3		)	(5.8		)
Total reconciling items	4.1			(1.3		)	6.3			(12.9		)
Total consolidated income before federal income tax	$	12.7		$	41.0		$	66.7		$	45.4

Investable assets attributable to the Company’s investment operations segment totaled $2,742.0 million and $2,658.7 million at September 30, 2019, and December 31, 2018, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table sets forth the reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30										Nine months ended September 30
	2019					2018					2019					2018
Amount at statutory rate	$	2.7		21.0	%	$	8.6		21.0	%	$	14.0		21.0	%	$	9.5		21.0	%
Tax-exempt interest and dividends received deduction	(0.7		)	(5.3	)	(0.5		)	(1.3	)	(2.1		)	(3.1	)	(1.7		)	(3.8	)
Other, net	(0.8		)	(6.3	)	(0.5		)	(1.1	)	0.1			—		0.3			0.6
Federal income tax expense	1.2			9.4	%	7.6			18.6	%	12.0			17.9	%	$	8.1		17.8	%

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Investments

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The following tables set forth the cost or amortized cost and fair value of investments by lot at September 30, 2019 and December 31, 2018:

($ millions)	Cost or amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Fair value
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	516.4	$	14.8	$	(1.2	)	$	530.0
Obligations of states and political subdivisions	415.3		21.8		—			437.1
Corporate securities	492.3		10.9		(1.1		)	502.1
U.S. government agencies mortgage-backed securities	705.0		18.2		(3.1		)	720.1
Total available-for-sale fixed maturities	$	2,129.0	$	65.7	$	(5.4	)	$	2,189.3
($ millions)	Cost or amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Fair value
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	438.4	$	3.2	$	(9.2	)	$	432.4
Obligations of states and political subdivisions	408.2		7.3		(0.9		)	414.6
Corporate securities	551.7		0.6		(11.7		)	540.6
U.S. government agencies mortgage-backed securities	789.9		3.3		(21.3		)	771.9
Total available-for-sale fixed maturities	$	2,188.2	$	14.4	$	(43.1	)	$	2,159.5

The following tables set forth the Company’s gross unrealized losses and fair value on its investments by lot, aggregated by investment category and length of time for individual securities that have been in a continuous unrealized loss position at September 30, 2019 and December 31, 2018:

($ millions, except # of positions)	Less than 12 months						12 months or more						Total
	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions
September 30, 2019
Fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	41.1	$	(0.1	)	9	$	184.5	$	(1.1	)	16	$	225.6	$	(1.2	)	25
Obligations of states and political subdivisions	—		—			—	4.1		—			1	4.1		—			1
Corporate securities	20.3		(0.3		)	2	56.9		$	(0.8	)	9	77.2		$	(1.1	)	11
U.S. government agencies mortgage-backed securities	50.9		(0.3		)	7	161.1		(2.8		)	35	212.0		(3.1		)	42
Total temporarily impaired securities	$	112.3	$	(0.7	)	18	$	406.6	$	(4.7	)	61	$	518.9	$	(5.4	)	79
($ millions, except # of positions)	Less than 12 months						12 months or more						Total
	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions
December 31, 2018
Fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	83.1	$	(1.8	)	7	$	259.6	$	(7.4	)	35	$	342.7	$	(9.2	)	42
Obligations of states and political subdivisions	63.6		(0.5		)	7	39.6		(0.4		)	8	103.2		(0.9		)	15
Corporate securities	244.0		(3.0		)	31	189.5		(8.7		)	30	433.5		(11.7		)	61
U.S. government agencies mortgage-backed securities	169.5		(2.8		)	18	385.5		(18.5		)	70	555.0		(21.3		)	88
Total temporarily impaired securities	$	560.2	$	(8.1	)	63	$	874.2	$	(35.0	)	143	$	1,434.4	$	(43.1	)	206

The Company reviewed its investments at September 30, 2019, and determined that no other-than-temporary impairment ("OTTI") existed in the gross unrealized holding losses.

The Company regularly monitors its available-for-sale investments that have fair values less than cost or amortized cost for signs of other-than-temporary impairment, an assessment that requires significant management judgment regarding the evidence known. Such judgments could change in the future as more information becomes known, which could negatively impact the amounts reported. Among the factors that management considers for fixed maturity securities are the financial condition of the issuer including receipt of scheduled principal and interest cash flows, and intent to sell, including if it is more likely than not that the Company will be required to sell the investments before recovery. When a fixed maturity has been determined to have an other-than-temporary impairment, the impairment charge is separated into an amount representing the credit loss, which is recognized in earnings as a realized loss, and the amount related to non-credit factors, which is recognized in accumulated other comprehensive income. Future increases or decreases in fair value, if not other-than-temporary, are included in accumulated other comprehensive income.

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturities by contractual maturity at September 30, 2019:

($ millions)	Amortized cost		Fair value
Due in 1 year or less	$	55.7	$	56.6
Due after 1 year through 5 years	562.7		569.4
Due after 5 years through 10 years	239.9		249.7
Due after 10 years	565.7		593.5
U.S. government agencies mortgage-backed securities	705.0		720.1
Total	$	2,129.0	$	2,189.3

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations with or without call or prepayment penalties.

At September 30, 2019, State Auto P&C had U.S. government agencies mortgage-backed fixed maturity securities, with a carrying value of approximately $106.5 million, that were pledged as collateral for the FHLB Loans (as defined in Note 3). In accordance with the terms of the FHLB Loans, State Auto P&C retains all rights regarding these pledged securities.

At September 30, 2019, State Auto P&C had fixed maturities with fair values of approximately $23.2 million pledged as collateral for the performance obligations under its reinsurance agreement with Home State County Mutual Insurance Company. In accordance with the terms of the trust agreement, State Auto P&C retains all rights regarding these securities, which are included in the “U.S. treasury securities and obligations of U.S. government agencies” classification of the Company’s fixed maturity securities portfolio.

Fixed maturities with fair values of $9.3 million and $8.9 million were on deposit with insurance regulators as required by law at September 30, 2019, and December 31, 2018, respectively. The Company retains all rights regarding these securities.

The following table sets forth the components of net investment income for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30				Nine months ended September 30
	2019		2018		2019		2018
Fixed maturities	$	15.3	$	16.4	$	47.7	$	49.4
Equity securities	3.0		3.0		8.9		8.6
Cash and cash equivalents, and other	1.1		1.7		4.2		5.2
Investment income	19.4		21.1		60.8		63.2
Investment expenses	0.1		0.3		0.4		1.0
Net investment income	$	19.3	$	20.8	$	60.4	$	62.2

The Company’s current investment strategy does not rely on the use of derivative financial instruments.

Proceeds on sales of investments were $284.1 million and $159.9 million for the nine months ended September 30, 2019, and 2018, respectively.

The following table sets forth the realized and unrealized holding gains (losses) on the Company’s investment portfolio for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Investment gains (losses), net:
Fixed maturities:
Realized gains on sales of securities	1.2			—			2.8			1.7
Net gains on fixed maturities	1.2			—			2.8			1.7
Equity securities:
Realized (losses) gains on sales of securities, net	(1.8		)	1.0			(2.5		)	5.4
Unrealized (losses) gains on securities still held, net	(4.1		)	16.4			46.4			12.8
Net (losses) gains on equity securities	(5.9		)	17.4			43.9			18.2
Other invested assets:
Unrealized (losses) gains on securities still held, net	(0.3		)	0.4			4.8			(1.7		)
Net (losses) gains on other invested assets	(0.3		)	0.4			4.8			(1.7		)
Other net realized loss	—			—			(1.3		)	—
Net (losses) gains on investments	$	(5.0	)	$	17.8		$	50.2		$	18.2
Change in unrealized holding gains (losses), net of tax:
Fixed maturities	$	21.4		$	(14.7	)	$	89.0		$	(63.3	)
Deferred federal income tax (liability) benefit	(4.5		)	3.1			(18.7		)	13.3
Change in net unrealized holding gains (losses), net of tax	$	16.9		$	(11.6	)	$	70.3		$	(50.0	)

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Investments - Components of Net Investment Income (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Net Investment Income [Line Items]
Investment income	$ 19.4	$ 21.1	$ 60.8	$ 63.2
Investment expenses	0.1	0.3	0.4	1.0
Net investment income	19.3	20.8	60.4	62.2
Equity Securities [Member]
Net Investment Income [Line Items]
Investment income	3.0	3.0	8.9	8.6
Cash and Cash Equivalents, and Other [Member]
Net Investment Income [Line Items]
Investment income	1.1	1.7	4.2	5.2
Fixed Maturities [Member]
Net Investment Income [Line Items]
Investment income	$ 15.3	$ 16.4	$ 47.7	$ 49.4

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Fair Value of Financial Instruments - Company Estimates Receivable from Affiliate using Market Quotations for U.S. Treasury Securities (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Document Period End Date	Sep. 30, 2019
Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable interest rate (percent)		7.00%
Note Receivable from Affiliate, 2009 [Member] | Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable interest rate (percent)	0.00%	7.00%
Note Receivable from Affiliate, 2019 [Member] | Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable interest rate (percent)	4.05%	0.00%
Reported Value Measurement [Member] | Note Receivable from Affiliate, 2009 [Member] | Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable from affiliate	$ 0.0	$ 70.0
Reported Value Measurement [Member] | Note Receivable from Affiliate, 2019 [Member] | Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable from affiliate	70.0	0.0
Estimate of Fair Value Measurement [Member] | Note Receivable from Affiliate, 2009 [Member] | Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable from affiliate	0.0	71.1
Estimate of Fair Value Measurement [Member] | Note Receivable from Affiliate, 2019 [Member] | Affiliated Entity [Member] | Level 2 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable from affiliate	$ 76.8	$ 0.0

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Reinsurance

9 Months Ended

Sep. 30, 2019

Insurance [Abstract]

Reinsurance

Reinsurance

The insurance subsidiaries of State Auto Financial, including State Auto P&C, Milbank and SA Ohio (collectively referred to as the “STFC Pooled Companies”) participate in a quota share reinsurance pooling arrangement (“the Pooling Arrangement”) with State Auto Mutual and its subsidiaries and affiliates (collectively referred to as the “Mutual Pooled Companies”).

The following table sets forth a summary of the Company’s external reinsurance transactions, as well as reinsurance transactions with State Auto Mutual under the Pooling Arrangement, for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Premiums earned:
Assumed from external insurers and reinsurers	$	21.0		$	17.3		$	59.3		$	41.9
Assumed under Pooling Arrangement	319.6			306.8			930.0			929.2
Ceded to external insurers and reinsurers	(6.6		)	(5.9		)	(18.8		)	(16.7		)
Ceded under Pooling Arrangement	(263.9		)	(234.9		)	(761.5		)	(678.1		)
Net assumed premiums earned	$	70.1		$	83.3		$	209.0		$	276.3
Losses and loss expenses incurred:
Assumed from external insurers and reinsurers	$	14.6		$	10.9		$	45.6		$	34.2
Assumed under Pooling Arrangement	209.3			191.4			639.4			622.3
Ceded to external insurers and reinsurers	(0.6		)	(1.9		)	(6.2		)	(3.4		)
Ceded under Pooling Arrangement	(185.1		)	(148.4		)	(514.3		)	(486.0		)
Net assumed losses and loss expenses incurred	$	38.2		$	52.0		$	164.5		$	167.1

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Basis of Presentation

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of State Auto Financial Corporation and Subsidiaries (“State Auto Financial” or the “Company”) have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of the Company, all adjustments (consisting of normal, recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. The balance sheet at December 31, 2018, has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “2018 Form 10-K”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the 2018 Form 10-K.

Revisions of Previously Issued Financial Statements

Revisions to certain line items in the consolidated statements of comprehensive income and consolidated statements of cash flows for the three and nine months ended September 30, 2018, were affected by revisions of previously issued financial statements.  All such changes to the consolidated statements of cash flows were included within cash flows from operating activities and all related changes in the consolidated statements of comprehensive income were isolated to unrecognized benefit plan obligations.  The basis of these revisions were described in Note 2 to our Consolidated Financial Statements set forth in Part II, Item 8, "Financial Statements and Supplementary Data" included in the 2018 Form 10-K.

Adoption of Recent Accounting Pronouncements

Leases

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)" that amended previous guidance on lease accounting. The new guidance requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance became effective beginning January 1, 2019 and it did not have a material impact on the Company’s results of operations, consolidated financial position or cash flows. The Company has elected the practical expedients contained in ASC 842-10-65-1(f) and therefore did not reassess the lease classification of its existing leases.

Pending Adoption of Recent Accounting Pronouncements

For information regarding other accounting pronouncements that the Company has not yet adopted, see the “Pending Adoption of Recent Accounting Pronouncements” section of Note 1 of the Notes to Consolidated Financial Statements in the 2018 Form 10-K.

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Earnings per Common Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Earnings (Loss) per Common Share

Net Earnings per Common Share

The following table sets forth the compilation of basic and diluted (loss) earnings per common share for the three and nine months ended September 30, 2019 and 2018:

($ and shares in millions, except per share amounts)	Three months ended September 30				Nine months ended September 30
	2019		2018		2019		2018
Numerator:
Net income for basic earnings per common share	$	11.5	$	33.4	$	54.7	$	37.3
Denominator:
Weighted average shares for basic (loss) earnings per common share	43.5		43.0		43.4		42.8
Effect of dilutive share-based awards	0.5		0.6		0.6		0.5
Adjusted weighted average shares for diluted net (loss) earnings per common share	44.0		43.6		44.0		43.3
Basic net earnings per common share	$	0.26	$	0.78	$	1.26	$	0.87
Diluted net earnings per common share	$	0.25	$	0.76	$	1.25	$	0.86

The following table sets forth common stock options, stock awards and restricted share units ("RSU award") of the Company that were not included in the computation of diluted earnings per common share because the exercise price of the options, or awards, was greater than the average market price or their inclusion would have been antidilutive for the three and nine months ended September 30, 2019 and 2018:

(shares in millions)	Three months ended September 30		Nine months ended September 30
	2019	2018	2019	2018
Total number of antidilutive options and awards	—	—	—	0.1

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Segment Information - Additional Information (Detail) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) Segment	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting Information [Line Items]
Acquisition And Operating Expenses	$ 109.7	$ 110.9	$ 325.2	$ 333.0
Number of reportable segments (segments) | Segment			3
Investable assets	$ 2,742.0		$ 2,742.0		$ 2,658.7

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Notes Payable and Open Line of Credit Notes Payable and Open Line of Credit (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Debt Disclosure [Abstract]
Debt Prepayment Cost	$ 0.0	$ 0.4

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Condensed Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Earned premiums (affiliated net assumed $71.9 and $115.3, respectively, and $251.1 and $349.0, respectively)	$ 319.6	$ 306.8	$ 930.0	$ 929.2
Net investment income (affiliate $1.3 and $1.3, respectively, and $3.7 and $3.7, respectively)	19.3	20.8	60.4	62.2
Net realized gains on investments:
Total net realized gains on investments	(5.0)	17.8	50.2	18.2
Other income from affiliates	0.6	0.6	1.6	1.8
Total revenues	334.5	346.0	1,042.2	1,011.4
Losses and loss expenses (affiliated net assumed $34.7 and $128.9, respectively, and $105.4 and $298.8, respectively)	208.4	191.0	637.6	621.1
Acquisition and operating expenses (affiliated net ceded $26.8 and affiliated net assumed $78.9, respectively, and $52.3 and $231.0, respectively)	109.7	110.9	325.2	333.0
Interest expense (affiliates $0.2 and $0.2, respectively, and $0.7 and $0.6, respectively)	1.2	1.2	3.7	4.5
Other expenses	2.5	1.9	9.0	7.4
Costs and Expenses	321.8	305.0	975.5	966.0
Income before federal income taxes	12.7	41.0	66.7	45.4
Current Income Tax Expense (Benefit)	0.0	(0.1)	(0.4)	(1.1)
Deferred Income Tax Expense (Benefit)	1.2	7.7	12.4	9.2
Federal income tax expense	1.2	7.6	12.0	8.1
Net income	$ 11.5	$ 33.4	$ 54.7	$ 37.3
Earnings per common share:
Basic (usd per share)	$ 0.26	$ 0.78	$ 1.26	$ 0.87
Diluted (usd per share)	0.25	0.76	1.25	0.86
Dividends paid per common share (usd per share)	$ 0.10	$ 0.10	$ 0.30	$ 0.30

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Other Comprehensive Income and Accumulated Other Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Income by Component, Net of Tax (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance	$ (41.7)	$ (95.8)	$ (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)
Other comprehensive income before reclassifications	17.8	(11.6)	72.5	(48.7)
Amounts reclassified from AOCI	(0.3)	1.3	(0.3)	2.7
Other comprehensive income (loss)	17.5	(10.3)	72.2	(46.0)
Ending balance	(24.2)	(106.1)	(24.2)	(106.1)
Reclassification out of Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Amounts reclassified from AOCI	(0.3)	1.3	(0.3)	2.7
Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance	33.2	(20.3)	(20.2)	66.0
Cumulative Effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018					(47.9)
Other comprehensive income before reclassifications	17.8	(11.6)	72.5	(48.7)
Amounts reclassified from AOCI	(0.9)	0.0	(2.2)	(1.3)
Other comprehensive income (loss)	16.9	(11.6)	70.3	(50.0)
Ending balance	50.1	(31.9)	50.1	(31.9)
Benefit Plan Items [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning balance	(74.9)	(75.5)	(76.2)	(62.2)
Cumulative Effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018					$ (16.0)
Other comprehensive income before reclassifications	0.0	0.0	0.0	0.0
Amounts reclassified from AOCI	0.6	1.3	1.9	4.0
Other comprehensive income (loss)	0.6	1.3	1.9	4.0
Ending balance	$ (74.3)	$ (74.2)	$ (74.3)	$ (74.2)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net income	$ 54.7	$ 37.3
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization, net	6.2	6.7
Share-based compensation	7.0	5.7
Net investment gain	(50.2)	(18.2)
Changes in operating assets and liabilities:
Deferred policy acquisition costs	(12.4)	5.8
Accrued investment income and other assets	(2.3)	(3.0)
Postretirement and pension benefits	(12.2)	(16.3)
Other liabilities and due to/from affiliates, net	(2.6)	(2.3)
Reinsurance recoverable on losses and loss expenses payable and prepaid reinsurance premiums	(55.0)	19.0
Losses and loss expenses payable	(54.1)	(56.9)
Unearned premiums	65.0	(16.2)
Excess Tax Benefit from Share-based Compensation, Operating Activities	(0.7)	0.0
Federal income taxes	12.7	8.1
Net cash used in operating activities	(43.9)	(30.3)
Cash flows from investing activities:
Purchases of fixed maturities available-for-sale	(459.9)	(267.0)
Purchases of equity securities	(48.9)	(82.2)
Purchases of other invested assets	(12.9)	(1.1)
Maturities, calls and pay downs of fixed maturities available-for-sale	267.1	180.4
Sales of fixed maturities available-for-sale	248.7	69.7
Sales of equity securities	34.4	89.3
Sales of other invested assets	1.0	0.9
Proceeds from Sale of Property, Plant, and Equipment	1.6	0.0
Net cash provided by (used in) investing activities	31.1	(10.0)
Cash flows from financing activities:
Proceeds from issuance of common stock	4.8	11.7
Payments to acquire treasury stock	(0.5)	(0.2)
Payment of dividends	(13.0)	(12.8)
Payment for Debt Extinguishment or Debt Prepayment Cost	0.0	(0.4)
Net cash used in financing activities	(8.7)	(1.7)
Net decrease in cash and cash equivalents	(21.5)	(42.0)
Cash and cash equivalents at beginning of period	59.8	91.5
Cash and cash equivalents at end of period	38.3	49.5
Supplemental disclosures:
Interest Paid, Excluding Capitalized Interest, Operating Activities	$ 3.5	$ 4.5

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Pension and Postretirement Benefit Plans (Tables)

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Company's Share of Net Periodic Cost Components

for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Pension						Postretirement						Pension						Postretirement
	Three months ended September 30												Nine months ended September 30
	2019			2018			2019			2018			2019			2018			2019			2018
Service cost	$	0.8		$	1.2		$	—		$	—		$	2.8		$	3.8		$	—		$	—
Interest cost	2.9			2.7			0.2			0.2			8.6			8.0			0.5			0.5
Expected return on plan assets	(4.2		)	(4.5		)	—			—			(12.5		)	(13.5		)	—			—
Amortization of:
Negative prior service cost	—			—			(1.4		)	(1.4		)	—			—			(4.1		)	(4.1		)
Net actuarial loss	1.5			2.1			0.1			0.1			4.5			6.2			0.2			0.2
Net periodic cost (benefit)	$	1.0		$	1.5		$	(1.1	)	$	(1.1	)	$	3.4		$	4.5		$	(3.4	)	$	(3.4	)

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Company's Investments within Fair Value Hierarchy

The following tables set forth the Company’s investments within the fair value hierarchy at September 30, 2019 and December 31, 2018:

($ millions)	Total		Level 1		Level 2
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	530.0	$	—	$	530.0
Obligations of states and political subdivisions	437.1		—		437.1
Corporate securities	502.1		—		502.1
U.S. government agencies mortgage-backed securities	720.1		—		720.1
Total available-for-sale fixed maturities	2,189.3		—		2,189.3
Equity securities:
Large-cap securities	99.1		99.1		—
Mutual and exchange traded funds	274.2		274.2		—
Total equity securities	373.3		373.3		—
Other invested assets	12.9		12.9		—
Total investments	$	2,575.5	$	386.2	$	2,189.3
($ millions)	Total		Level 1		Level 2
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	432.4	$	—	$	432.4
Obligations of states and political subdivisions	414.6		—		414.6
Corporate securities	540.6		—		540.6
U.S. government agencies mortgage-backed securities	771.9		—		771.9
Total available-for-sale fixed maturities	2,159.5		—		2,159.5
Equity securities:
Large-cap securities	77.2		77.2		—
Mutual and exchange traded funds	237.8		237.8		—
Total equity securities	315.0		315.0		—
Other invested assets	10.3		10.3		—
Total investments	$	2,484.8	$	325.3	$	2,159.5

Company Estimates Receivable from Affiliate using Market Quotations for U.S. Treasury Securities

Consequently this has been placed in Level 2 of the fair value hierarchy.

($ millions, except interest rates)	September 30, 2019						December 31, 2018
	Carrying value		Fair value		Interest rate		Carrying value		Fair value		Interest rate
Notes receivable from affiliate, May 2009	$	—	$	—	—	%	$	70.0	$	71.1	7.00	%
Notes receivable from affiliate, May 2019	$	70.0	$	76.8	4.05	%	$	—	$	—	—	%

Included in Notes Payable are Senior Notes and Subordinated Debentures

The carrying amount of the Subordinated Debentures approximates its fair value as the interest rate adjusts quarterly and has been disclosed in Level 3.

($ millions, except interest rates)	September 30, 2019						December 31, 2018
	Carrying value		Fair Value		Interest rate		Carrying value		Fair value		Interest rate
FHLB Loan due 2021: issued $21.5, September 2016 with fixed interest	$	21.5	$	21.5	1.73	%	$	21.5	$	20.9	1.73	%
FHLB Loan due 2033: issued $85.0, May 2018 with fixed interest	85.3		100.1		3.96	%	85.3		89.0		3.96	%
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest	15.2		15.2		6.33	%	15.2		15.2		6.94	%
Total notes payable	$	122.0	$	136.8			$	122.0	$	125.1

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Pension and Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2019

Retirement Benefits [Abstract]

Pension and Postretirement Benefit Plans

Pension and Postretirement Benefit Plans

The following table sets forth information regarding the Company’s share of pension and postretirement benefit plans’

components of net periodic cost for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Pension						Postretirement						Pension						Postretirement
	Three months ended September 30												Nine months ended September 30
	2019			2018			2019			2018			2019			2018			2019			2018
Service cost	$	0.8		$	1.2		$	—		$	—		$	2.8		$	3.8		$	—		$	—
Interest cost	2.9			2.7			0.2			0.2			8.6			8.0			0.5			0.5
Expected return on plan assets	(4.2		)	(4.5		)	—			—			(12.5		)	(13.5		)	—			—
Amortization of:
Negative prior service cost	—			—			(1.4		)	(1.4		)	—			—			(4.1		)	(4.1		)
Net actuarial loss	1.5			2.1			0.1			0.1			4.5			6.2			0.2			0.2
Net periodic cost (benefit)	$	1.0		$	1.5		$	(1.1	)	$	(1.1	)	$	3.4		$	4.5		$	(3.4	)	$	(3.4	)

The Company contributed $10.0 million to its pension plan for the nine months ended September 30, 2019.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Below is the fair value hierarchy that categorizes into three levels the inputs to valuation techniques that are used to measure fair value:

• Level 1 includes observable inputs which reflect quoted prices for identical assets or liabilities in active markets at the measurement date.

• Level 2 includes observable inputs for assets or liabilities other than quoted prices included in Level 1, and it includes valuation techniques which use prices for similar assets and liabilities.

• Level 3 includes unobservable inputs which reflect the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

The Company utilizes a nationally recognized third party pricing service to estimate the majority of its investment portfolio’s fair value. The Company obtains one price per security and the processes and control procedures employed by the Company are designed to ensure the value is accurately recorded on an unadjusted basis. Through discussions with the pricing service, the Company gains an understanding of the methodologies used to price the different types of securities, that the data and the valuation methods utilized are appropriate and consistently applied, and that the assumptions are reasonable and representative of fair value. To validate the reasonableness of the valuations obtained from the pricing service, the Company compares to fair value pricing information gathered from other independent pricing sources. At September 30, 2019, and December 31, 2018, the Company did not adjust any of the prices received from the pricing service.

Fixed Maturities

The Company utilizes a nationally recognized third party pricing service to estimate fair value measurements for the majority of its fixed maturities. The fair value estimate of the Company’s fixed maturity investments are determined by evaluations that are based on observable market information rather than market quotes. Inputs to the evaluations include, but are not limited to, market prices from recently completed transactions and transactions of comparable securities, interest rate yield curves, credit spreads, and other market-observable information. The fixed maturity portfolio pricing obtained from the pricing service is reviewed for reasonableness. The Company regularly selects a sample of security prices which are compared to one or more alternative pricing sources for reasonableness. Any significant discrepancies with the pricing are returned to the pricing service for further explanation and, if necessary, adjustments are made. To date, the Company has not identified any significant discrepancies in the pricing provided by its third party pricing service. Investments valued using these inputs include U.S. treasury securities and obligations of U.S. government agencies, obligations of states and political subdivisions, corporate securities (except for a security discussed below), and U.S. government agencies' mortgage-backed securities. All unadjusted estimates of fair value for fixed maturities priced by the pricing service are included in the amounts disclosed in Level 2 of the hierarchy. If market inputs are unavailable, then no fair value is provided by the pricing service. For these securities, fair value is determined either by requesting brokers who are knowledgeable about these securities to provide a quote; or the Company internally determines the fair values by employing widely accepted pricing valuation models, and depending on the level of observable market inputs, renders the fair value estimate as Level 2 or Level 3.

Transfers between level categorizations may occur due to changes in the availability of market observable inputs. Transfers in and out of level categorizations are reported as having occurred at the beginning of the quarter in which the transfer occurred.

Equities

The fair value of each equity security is based on an observable market price for an identical asset in an active market and is priced by the same pricing service discussed above. All equity securities are recorded using unadjusted market prices and have been disclosed in Level 1.

 Other Invested Assets

Included in other invested assets is one international fund (“the fund”) that invests in equity securities of foreign issuers and is managed by a third party investment manager. The fund had a fair value of $51.7 million and $38.5 million at September 30, 2019, and December 31, 2018, respectively, which was determined using the fund’s net asset value. The Company employs procedures to assess the reasonableness of the fair value of the fund, including obtaining and reviewing the fund’s audited financial statements. There are no unfunded commitments related to the fund. The Company may not sell its investment in the fund; however, the Company may redeem all or a portion of its investment in the fund at net asset value per share with the appropriate prior written notice. In accordance with Accounting Standard Codification 820-10, this investment is measured at fair value using the net asset value per share practical expedient and has not been classified in the fair value hierarchy. Fair values presented here are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the condensed consolidated balance sheets.

The remainder of the Company’s other invested assets consist primarily of holdings in publicly-traded mutual funds. The Company believes that its prices for these publicly-traded mutual funds based on an observable market price for an identical asset in an active market reflect their fair values and consequently these securities have been disclosed in Level 1.

 The following tables set forth the Company’s investments within the fair value hierarchy at September 30, 2019 and December 31, 2018:

($ millions)	Total		Level 1		Level 2
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	530.0	$	—	$	530.0
Obligations of states and political subdivisions	437.1		—		437.1
Corporate securities	502.1		—		502.1
U.S. government agencies mortgage-backed securities	720.1		—		720.1
Total available-for-sale fixed maturities	2,189.3		—		2,189.3
Equity securities:
Large-cap securities	99.1		99.1		—
Mutual and exchange traded funds	274.2		274.2		—
Total equity securities	373.3		373.3		—
Other invested assets	12.9		12.9		—
Total investments	$	2,575.5	$	386.2	$	2,189.3
($ millions)	Total		Level 1		Level 2
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	432.4	$	—	$	432.4
Obligations of states and political subdivisions	414.6		—		414.6
Corporate securities	540.6		—		540.6
U.S. government agencies mortgage-backed securities	771.9		—		771.9
Total available-for-sale fixed maturities	2,159.5		—		2,159.5
Equity securities:
Large-cap securities	77.2		77.2		—
Mutual and exchange traded funds	237.8		237.8		—
Total equity securities	315.0		315.0		—
Other invested assets	10.3		10.3		—
Total investments	$	2,484.8	$	325.3	$	2,159.5

The following sections describe the valuation methods used by the Company for each type of financial instrument it holds that is not measured at fair value but for which fair value is disclosed:

Financial Instruments Disclosed, But Not Carried, At Fair Value

Other Invested Assets, at Cost

Included in other invested assets, at cost are common stock of the Federal Home Loan Bank of Cincinnati (the "FHLB") and the Trust Securities. The Trust Securities and FHLB common stock are carried at cost, which approximates fair value. The fair value of the FHLB common stock at September 30, 2019, was $6.0 million and the fair value of the Trust Securities was $0.5 million. The investments have been placed in Level 3 of the fair value hierarchy.

Notes Receivable from Affiliate

In May 2009, the Company entered into two separate credit agreements with State Automobile Mutual Insurance Company (“State Auto Mutual") pursuant to which it loaned State Auto Mutual a total of $70.0 million at an interest rate of 7.00%. In May 2019, the Company refinanced the two credit agreements with State Auto Mutual at an interest rate of 4.05%, with principal payable in May 2029. The Company estimates the fair value of the notes receivable from affiliate using market quotations for U.S. treasury securities with similar maturity dates and applies an appropriate credit spread. Consequently this has been placed in Level 2 of the fair value hierarchy.

($ millions, except interest rates)	September 30, 2019						December 31, 2018
	Carrying value		Fair value		Interest rate		Carrying value		Fair value		Interest rate
Notes receivable from affiliate, May 2009	$	—	$	—	—	%	$	70.0	$	71.1	7.00	%
Notes receivable from affiliate, May 2019	$	70.0	$	76.8	4.05	%	$	—	$	—	—	%

Notes Payable

Included in notes payable are the FHLB Loans and Subordinated Debentures. The Company estimates the fair value of the FHLB Loans by discounting cash flows using a borrowing rate currently available to the Company for loans with similar terms. The FHLB Loans have been placed in Level 3 of the fair value hierarchy. The carrying amount of the Subordinated Debentures approximates its fair value as the interest rate adjusts quarterly and has been disclosed in Level 3.

($ millions, except interest rates)	September 30, 2019						December 31, 2018
	Carrying value		Fair Value		Interest rate		Carrying value		Fair value		Interest rate
FHLB Loan due 2021: issued $21.5, September 2016 with fixed interest	$	21.5	$	21.5	1.73	%	$	21.5	$	20.9	1.73	%
FHLB Loan due 2033: issued $85.0, May 2018 with fixed interest	85.3		100.1		3.96	%	85.3		89.0		3.96	%
Affiliate Subordinated Debentures due 2033: issued $15.5, May 2003 with variable interest	15.2		15.2		6.33	%	15.2		15.2		6.94	%
Total notes payable	$	122.0	$	136.8			$	122.0	$	125.1

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Investments - Available for Sale Securities Continuous Unrealized Loss Position Fair Value and Aggregate Losses (Detail) $ in Millions	Sep. 30, 2019 USD ($) position	Dec. 31, 2018 USD ($) position
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, Fair value	$ 112.3	$ 560.2
Less than 12 months, Unrealized losses	$ (0.7)	$ (8.1)
Less than 12 months, Number of positions | position	18	63
12 months or more, Fair value	$ 406.6	$ 874.2
12 months or more, Unrealized losses	$ (4.7)	$ (35.0)
12 months or more, Number of positions | position	61	143
Total, Fair value	$ 518.9	$ 1,434.4
Total, Unrealized losses	$ (5.4)	$ (43.1)
Total, Number of positions | position	79	206
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, Fair value	$ 41.1	$ 83.1
Less than 12 months, Unrealized losses	$ (0.1)	$ (1.8)
Less than 12 months, Number of positions | position	9	7
12 months or more, Fair value	$ 184.5	$ 259.6
12 months or more, Unrealized losses	$ (1.1)	$ (7.4)
12 months or more, Number of positions | position	16	35
Total, Fair value	$ 225.6	$ 342.7
Total, Unrealized losses	$ (1.2)	$ (9.2)
Total, Number of positions | position	25	42
Obligations of States and Political Subdivisions [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, Fair value	$ 0.0	$ 63.6
Less than 12 months, Unrealized losses	$ 0.0	$ (0.5)
Less than 12 months, Number of positions | position	0	7
12 months or more, Fair value	$ 4.1	$ 39.6
12 months or more, Unrealized losses	$ 0.0	$ (0.4)
12 months or more, Number of positions | position	1	8
Total, Fair value	$ 4.1	$ 103.2
Total, Unrealized losses	$ 0.0	$ (0.9)
Total, Number of positions | position	1	15
Corporate Securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, Fair value	$ 20.3	$ 244.0
Less than 12 months, Unrealized losses	$ (0.3)	$ (3.0)
Less than 12 months, Number of positions | position	2	31
12 months or more, Fair value	$ 56.9	$ 189.5
12 months or more, Unrealized losses	$ (0.8)	$ (8.7)
12 months or more, Number of positions | position	9	30
Total, Fair value	$ 77.2	$ 433.5
Total, Unrealized losses	$ (1.1)	$ (11.7)
Total, Number of positions | position	11	61
U.S. Government Agencies Mortgage-Backed Securities [Member]
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items]
Less than 12 months, Fair value	$ 50.9	$ 169.5
Less than 12 months, Unrealized losses	$ (0.3)	$ (2.8)
Less than 12 months, Number of positions | position	7	18
12 months or more, Fair value	$ 161.1	$ 385.5
12 months or more, Unrealized losses	$ (2.8)	$ (18.5)
12 months or more, Number of positions | position	35	70
Total, Fair value	$ 212.0	$ 555.0
Total, Unrealized losses	$ (3.1)	$ (21.3)
Total, Number of positions | position	42	88

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Investments - Additional Information (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Financial Instruments, Owned and Pledged as Collateral, at Fair Value	$ 23.2
Fixed maturities fair value of deposit with insurance regulators	9.3		$ 8.9
Proceeds on sale of available-for-sale securities	284.1	$ 159.9
Federal Home Loan Bank of Cincinnati [Member]
Debt Securities, Available-for-sale [Line Items]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 106.5

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Fair Value of Financial Instruments - Additional Information (Detail) $ in Millions	1 Months Ended		12 Months Ended
	May 31, 2019 Agreement	May 31, 2009 Agreement	Dec. 31, 2018 USD ($)	Sep. 30, 2019 USD ($)
Fair Value Measurements Disclosure [Line Items]
Other invested assets			$ 48.8	$ 64.6
Other invested assets, at cost			5.6	6.5
Number of Credit Agreements | Agreement	2	2
Notes receivable from affiliate			70.0	70.0
Level 3 [Member]
Fair Value Measurements Disclosure [Line Items]
Federal home loan bank stock				6.0
Other invested assets, at cost				$ 0.5
International funds [Member]
Fair Value Measurements Disclosure [Line Items]
Number of available for sale securities				1
Other invested assets			$ 38.5	$ 51.7
Affiliated Entity [Member]
Fair Value Measurements Disclosure [Line Items]
Notes receivable from affiliate				$ 70.0
Affiliated Entity [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Measurements Disclosure [Line Items]
Notes receivable interest rate (percent)			7.00%

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Earnings Per Common Share - Options to Purchase Shares of Common Stock (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Number of antidilutive options and awards	0	0	0	0.1

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Losses and Loss Expenses Payable Losses and Loss Expenses Payable - Additional Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Liability for Claims and Claims Adjustment Expense [Line Items]
Document Period End Date	Sep. 30, 2019
Prior Year Claims and Claims Adjustment Expense	$ (55.1)	$ (57.6)
Business Insurance Segments [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense		(56.4)
Specialty Insurance [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense		(4.1)
Homeowners [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense		(7.2)
Middle Market Commercial [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense	(7.2)
Personal Auto [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense	(11.0)	(18.5)
Commercial Auto [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense		(5.7)
Workers' compensation [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense	(13.4)	(8.4)
E&S Casualty [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense		(3.4)
Programs [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense		(0.9)
Small commercial [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense	(11.8)	$ (6.5)
Total Insurance Segments [Member]
Liability for Claims and Claims Adjustment Expense [Line Items]
Prior Year Claims and Claims Adjustment Expense	$ (54.1)

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Condensed Consolidated Balance Sheets - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Document Period End Date	Sep. 30, 2019
Assets
Fixed maturities, available-for-sale, at fair value (amortized cost $2,129.0 and $2,188.2, respectively)	$ 2,189.3	$ 2,159.5
Equity securities	373.3	315.0
Other invested assets	64.6	48.8
Other invested assets, at cost	6.5	5.6
Notes receivable from affiliate	70.0	70.0
Total investments	2,703.7	2,598.9
Cash and cash equivalents	38.3	59.8
Accrued investment income and other assets	34.7	32.4
Deferred policy acquisition costs (affiliated net assumed $53.0 and $48.3, respectively)	114.3	101.9
Reinsurance recoverable on losses and loss expenses payable	7.2	5.5
Prepaid reinsurance premiums	7.5	6.6
Due from Affiliates	17.4	0.0
Current federal income taxes	6.3	5.9
Net deferred federal income taxes	46.2	77.8
Property and equipment, at cost	4.2	7.1
Total assets	2,979.8	2,895.9
Liabilities and Stockholders’ Equity
Losses and loss expenses payable (affiliated net assumed $521.5 and $593.6, respectively)	1,092.7	1,146.8
Unearned premiums (affiliated net assumed $111.7 and $112.4, respectively)	649.2	584.2
Notes payable (affiliates $15.2 and $15.2, respectively)	122.0	122.0
Pension and postretirement benefits	70.3	83.0
Due to Affiliate	0.0	22.4
Other liabilities (affiliated net assumed $13.1 and $19.9, respectively)	101.9	119.0
Total liabilities	2,036.1	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	125.8	125.0
Treasury stock, 6.8 and 6.8 shares, respectively, at cost	(117.5)	(117.0)
Additional paid-in capital	205.2	194.2
Accumulated other comprehensive loss	(24.2)	(96.4)
Retained earnings	754.4	712.7
Total stockholders’ equity	943.7	818.5
Total liabilities and stockholders’ equity	2,979.8	2,895.9
Class A Preferred Stock [Member]
Stockholders’ equity:
Preferred stock value	0.0	0.0
Class B Preferred Stock [Member]
Stockholders’ equity:
Preferred stock value	$ 0.0	$ 0.0

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 11.5	$ 33.4	$ 54.7	$ 37.3
Net unrealized holding gain (loss) on fixed available-for-sale investments:
Unrealized holding gain (loss)	22.6	(14.7)	91.8	(61.6)
Reclassification adjustments for gains realized in net income	(1.2)	0.0	(2.8)	(1.7)
Income tax (expense) benefit	(4.5)	3.1	(18.7)	13.3
Total net unrealized holding gain (loss) on available-for-sale investments	16.9	(11.6)	70.3	(50.0)
Reclassification adjustments for amortization to statements of income:
Negative prior service cost	(1.6)	(1.6)	(4.8)	(4.8)
Net actuarial loss	2.4	3.3	7.2	9.9
Income tax expense	(0.2)	(0.4)	(0.5)	(1.1)
Total net unrecognized benefit plan obligations	0.6	1.3	1.9	4.0
Other comprehensive income (loss)	17.5	(10.3)	72.2	(46.0)
Comprehensive income (loss)	$ 29.0	$ 23.1	$ 126.9	$ (8.7)

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Pension and Postretirement Benefit Plans - Company's Share of Net Periodic Cost Components (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Pension [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	$ 0.8	$ 1.2	$ 2.8	$ 3.8
Interest cost	2.9	2.7	8.6	8.0
Expected return on plan assets	(4.2)	(4.5)	(12.5)	(13.5)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	0.0	0.0	0.0	0.0
Amortization of:
Defined Benefit Plan, Amortization of Gain (Loss)	1.5	2.1	4.5	6.2
Net periodic cost (benefit)	1.0	1.5	3.4	4.5
Postretirement [Member]
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Service cost	0.0	0.0	0.0	0.0
Interest cost	0.2	0.2	0.5	0.5
Expected return on plan assets	0.0	0.0	0.0	0.0
Defined Benefit Plan, Amortization of Prior Service Cost (Credit)	(1.4)	(1.4)	(4.1)	(4.1)
Amortization of:
Defined Benefit Plan, Amortization of Gain (Loss)	0.1	0.1	0.2	0.2
Net periodic cost (benefit)	$ (1.1)	$ (1.1)	$ (3.4)	$ (3.4)

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Earnings Per Common Share - Compilation of Basic and Diluted Earnings (Loss) Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Numerator:
Net income	$ 11.5	$ 33.4	$ 54.7	$ 37.3
Denominator:
Weighted average shares for basic net earnings per common share (shares)	43,500,000	43.0	43,400,000	42.8
Effect of dilutive share-based awards (shares)	500,000	0.6	600,000	0.5
Adjusted weighted average shares for diluted net earnings per common share (shares)	44,000,000.0	43.6	44,000,000.0	43.3
Basic net (loss) earnings per common share (usd per share)	$ 0.26	$ 0.78	$ 1.26	$ 0.87
Diluted net (loss) earnings per common share (usd per share)	$ 0.25	$ 0.76	$ 1.25	$ 0.86

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Earnings per Common Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Compilation of Basic and Diluted Earnings Per Common Share

The following table sets forth the compilation of basic and diluted (loss) earnings per common share for the three and nine months ended September 30, 2019 and 2018:

($ and shares in millions, except per share amounts)	Three months ended September 30				Nine months ended September 30
	2019		2018		2019		2018
Numerator:
Net income for basic earnings per common share	$	11.5	$	33.4	$	54.7	$	37.3
Denominator:
Weighted average shares for basic (loss) earnings per common share	43.5		43.0		43.4		42.8
Effect of dilutive share-based awards	0.5		0.6		0.6		0.5
Adjusted weighted average shares for diluted net (loss) earnings per common share	44.0		43.6		44.0		43.3
Basic net earnings per common share	$	0.26	$	0.78	$	1.26	$	0.87
Diluted net earnings per common share	$	0.25	$	0.76	$	1.25	$	0.86

Options to Purchase Shares of Common Stock

The following table sets forth common stock options, stock awards and restricted share units ("RSU award") of the Company that were not included in the computation of diluted earnings per common share because the exercise price of the options, or awards, was greater than the average market price or their inclusion would have been antidilutive for the three and nine months ended September 30, 2019 and 2018:

(shares in millions)	Three months ended September 30		Nine months ended September 30
	2019	2018	2019	2018
Total number of antidilutive options and awards	—	—	—	0.1

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Reinsurance (Tables)

9 Months Ended

Sep. 30, 2019

Insurance [Abstract]

Summary of External Reinsurance Transactions with State Auto Mutual Under Pooling Arrangement

The following table sets forth a summary of the Company’s external reinsurance transactions, as well as reinsurance transactions with State Auto Mutual under the Pooling Arrangement, for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Premiums earned:
Assumed from external insurers and reinsurers	$	21.0		$	17.3		$	59.3		$	41.9
Assumed under Pooling Arrangement	319.6			306.8			930.0			929.2
Ceded to external insurers and reinsurers	(6.6		)	(5.9		)	(18.8		)	(16.7		)
Ceded under Pooling Arrangement	(263.9		)	(234.9		)	(761.5		)	(678.1		)
Net assumed premiums earned	$	70.1		$	83.3		$	209.0		$	276.3
Losses and loss expenses incurred:
Assumed from external insurers and reinsurers	$	14.6		$	10.9		$	45.6		$	34.2
Assumed under Pooling Arrangement	209.3			191.4			639.4			622.3
Ceded to external insurers and reinsurers	(0.6		)	(1.9		)	(6.2		)	(3.4		)
Ceded under Pooling Arrangement	(185.1		)	(148.4		)	(514.3		)	(486.0		)
Net assumed losses and loss expenses incurred	$	38.2		$	52.0		$	164.5		$	167.1

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Contingencies and Litigation

9 Months Ended

Sep. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Litigation

Contingencies and Litigation

In accordance with the Contingencies Topic of the FASB's Accounting Standards Codification, the Company accrues for a litigation-related liability when it is probable that such a liability has been incurred and the amount can be reasonably estimated. The Company reviews all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, the Company cannot reasonably estimate a loss or a range of loss, if any, particularly for proceedings that are in their early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. If the loss contingency in question is not both probable and reasonably estimable, the Company does not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. Based on currently available information known to the Company, it believes that its reserves for litigation-related liabilities are reasonable. However, in the event that a legal proceeding results in a substantial judgment against, or settlement by, the Company, there can be no assurance that any resulting liability or financial commitment would not have a material adverse effect on the financial condition, results of operations or cash flows of the consolidated financial statements of the Company.

The Company is involved in lawsuits in the ordinary course of its business arising out of or otherwise related to its insurance policies. Additionally, from time to time the Company may be involved in lawsuits, including class actions, in the ordinary course of business but not arising out of or otherwise related to its insurance policies. These lawsuits are in various stages of development. The Company generally will contest these matters vigorously but may pursue settlement if appropriate. Based on currently available information, the Company does not believe it is reasonably possible that any such lawsuit or related lawsuits will be material to its results of operations or have a material adverse effect on its consolidated financial position, results of operations or cash flows.

Additionally, the Company may be impacted by adverse regulatory actions and adverse court decisions where insurance coverages are expanded beyond the scope originally contemplated in its insurance policies. The Company believes that the effects, if any, of such regulatory actions and published court decisions are not likely to have a material adverse effect on its consolidated financial position, results of operations or cash flows.

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Other Comprehensive Income and Accumulated Other Comprehensive Income - Schedule of Reclassifications Out of Accumulated Other Comprehensive Income by Component (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gain/(loss) on sale of securities	$ (5.0)	$ 17.8	$ 50.2	$ 18.2
Tax (expense) benefit	(1.2)	(7.6)	(12.0)	(8.1)
Total reclassifications for the period	0.3	(1.3)	0.3	(2.7)
Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications for the period	0.9	0.0	2.2	1.3
Benefit Plan Items [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications for the period	(0.6)	(1.3)	(1.9)	(4.0)
Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Total reclassifications for the period	0.3	(1.3)	0.3	(2.7)
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Realized gain/(loss) on sale of securities	1.2	0.0	2.8	1.7
Total before tax	1.2	0.0	2.8	1.7
Tax (expense) benefit	(0.3)	0.0	(0.6)	(0.4)
Net of tax	0.9	0.0	2.2	1.3
Reclassification Out of Accumulated Other Comprehensive Income [Member] | Benefit Plan Items [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Accumulated other comprehensive income components/Negative prior-service costs	1.6	1.6	4.8	4.8
Accumulated other comprehensive income components/Net actuarial loss	(2.4)	(3.3)	(7.2)	(9.9)
Total before tax	(0.8)	(1.7)	(2.4)	(5.1)
Tax (expense) benefit	0.2	0.4	0.5	1.1
Net of tax	$ (0.6)	$ (1.3)	$ (1.9)	$ (4.0)

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Losses and Loss Expenses Payable Losses and Loss Expenses Payable - Schedule of Activity in Liability for Unpaid Losses and Loss Expenses Payable (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017
Losses and Loss Expenses Payable [Abstract]
Liability for Claims and Claims Adjustment Expense, Property Casualty Liability	$ 1,092.7	$ 1,198.7	$ 1,092.7	$ 1,198.7	$ 1,146.8	$ 1,255.6
Reinsurance Recoverables, Including Reinsurance Premium Paid	7.2	5.0	7.2	5.0	5.5	3.1
Liability for Unpaid Claims and Claims Adjustment Expense, Net	1,085.5	1,193.7	1,085.5	1,193.7	$ 1,141.3	$ 1,252.5
Current Year Claims and Claims Adjustment Expense			692.7	678.7
Prior Year Claims and Claims Adjustment Expense			(55.1)	(57.6)
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims	$ 208.4	$ 191.0	637.6	621.1
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year			366.4	314.1
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years			327.0	365.8
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid			$ 693.4	$ 679.9

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Fixed maturities, available-for-sale, amortized cost	$ 2,129.0	$ 2,188.2
Deferred policy acquisitions costs from affiliates	53.0	48.3
Losses and loss expenses payable, affiliates	521.5	593.6
Unearned premiums, affiliates	111.7	112.4
Notes payable, affiliates	15.2	15.2
Net Other Liabilities from Affiliates	$ 13.1	$ 19.9
Common stock, no par value (usd per share)	$ 0	$ 0
Common stock, shares authorized (shares)	100,000,000	100,000,000
Common stock, shares issued (shares)	50,300,000	50,000,000
Common stock, stated value per share (usd per share)	$ 2.50	$ 2.50
Treasury stock (shares)	6,800,000	6,800,000
Class A Preferred Stock [Member]
Preferred stock, no par value (usd per share)	$ 0	$ 0
Preferred stock, shares authorized (shares)	2,500,000	2,500,000
Preferred stock, shares issued (shares)	0	0
Class B Preferred Stock [Member]
Preferred stock, no par value (usd per share)	$ 0	$ 0
Preferred stock, shares authorized (shares)	2,500,000	2,500,000
Preferred stock, shares issued (shares)	0	0

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Condensed Consolidated Statement of Stockholders' Equity Statement - USD ($) shares in Millions, $ in Millions	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]
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)
Balance at beginning of year (shares) at Dec. 31, 2017		(49.2)	(6.8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares (shares)		0.6
Balance at end of year (shares) at Sep. 30, 2018		(49.8)	(6.8)
Balance at beginning of year at Dec. 31, 2017		$ (123.0)	$ (116.8)	$ (171.8)	$ (3.8)	$ (653.2)
Balance at end of year at Sep. 30, 2018	(831.6)	(124.5)	(117.0)	(188.6)	106.1	(741.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares		1.5		10.1
Shares acquired on stock award exercises and vested restricted shares			$ (0.2)
Stock awards granted				6.7
Change in net unrealized holding (losses) gains, net of tax	(50.0)				(50.0)
Change in unrecognized benefit plan obligations, net of tax and reclassification adjustments	4.0				4.0
Net income (loss)	37.3					37.3
Cash dividends paid		$ (12.8)
Balance at beginning of year (shares) at Jun. 30, 2018		(49.7)	(6.8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares (shares)		0.1
Balance at end of year (shares) at Sep. 30, 2018		(49.8)	(6.8)
Balance at beginning of year at Jun. 30, 2018		$ (124.1)	$ (116.9)	(184.8)	95.8	(712.3)
Balance at end of year at Sep. 30, 2018	(831.6)	(124.5)	(117.0)	(188.6)	106.1	(741.6)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares		0.4		2.0
Shares acquired on stock award exercises and vested restricted shares			$ (0.1)
Stock awards granted				1.8
Change in net unrealized holding (losses) gains, net of tax	(11.6)				(11.6)
Change in unrecognized benefit plan obligations, net of tax and reclassification adjustments	1.3				1.3
Net income (loss)	$ 33.4					33.4
Cash dividends paid		$ (4.1)
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)	63.9
Document Fiscal Year Focus	2019
Balance at beginning of year (shares) at Dec. 31, 2018		(50.0)	(6.8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares (shares)		0.3
Balance at end of year (shares) at Sep. 30, 2019		(50.3)	(6.8)
Balance at beginning of year at Dec. 31, 2018	$ (818.5)	$ (125.0)	$ (117.0)	(194.2)	96.4	(712.7)
Balance at end of year at Sep. 30, 2019	(943.7)	(125.8)	(117.5)	(205.2)	24.2	(754.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares		0.8		4.0
Shares acquired on stock award exercises and vested restricted shares			$ (0.5)
Stock awards granted				7.0
Change in net unrealized holding (losses) gains, net of tax	70.3				70.3
Change in unrecognized benefit plan obligations, net of tax and reclassification adjustments	1.9				1.9
Net income (loss)	54.7					54.7
Cash dividends paid		$ (13.0)
Balance at beginning of year (shares) at Jun. 30, 2019		(50.3)	(6.8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares (shares)		0.0
Balance at end of year (shares) at Sep. 30, 2019		(50.3)	(6.8)
Balance at beginning of year at Jun. 30, 2019		$ (125.7)	$ (117.5)	(202.5)	41.7	(747.2)
Balance at end of year at Sep. 30, 2019	(943.7)	(125.8)	(117.5)	(205.2)	24.2	(754.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares		0.1		0.7
Shares acquired on stock award exercises and vested restricted shares			$ 0.0
Stock awards granted				$ 2.0
Change in net unrealized holding (losses) gains, net of tax	16.9				16.9
Change in unrecognized benefit plan obligations, net of tax and reclassification adjustments	0.6				0.6
Net income (loss)	$ 11.5					11.5
Cash dividends paid		$ (4.3)
Cumulative Effect of change in accounting for equity securities and other invested assets and reclassification of stranded tax effects as of January 1, 2018					$ 0.0	$ 0.0

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Income Taxes - Reconciliation Between Actual Federal Income Tax Expense (Benefit) and Amount Computed at Indicated Statutory Rate (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Amount at statutory rate	$ 2.7	$ 8.6	$ 14.0	$ 9.5
Tax-exempt interest and dividends received deduction	(0.7)	(0.5)	(2.1)	(1.7)
Other, net	(0.8)	(0.5)	0.1	0.3
Federal income tax expense and effective rate	1.2	7.6	12.0	8.1
Income Tax Expense (Benefit)	$ 1.2	$ 7.6	$ 12.0	$ 8.1
Effective Income Tax Rate Reconciliation, Percent [Abstract]
Amount at statutory rate (percent)	21.00%	21.00%	21.00%	21.00%
Tax-exempt interest and dividends received deduction (percent)	(5.30%)	(1.30%)	(3.10%)	(3.80%)
Other, net (percent)	(6.30%)	(1.10%)	0.00%	0.60%
Effective Income Tax Rate Reconciliation, Deduction, Percent	9.40%	18.60%	17.90%	17.80%

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2019

Income Tax Disclosure [Abstract]

Reconciliation Between Actual Federal Income Tax Benefit and Amount Computed at Indicated Statutory Rate

The following table sets forth the reconciliation between actual federal income tax expense and the amount computed at the indicated statutory rate for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30										Nine months ended September 30
	2019					2018					2019					2018
Amount at statutory rate	$	2.7		21.0	%	$	8.6		21.0	%	$	14.0		21.0	%	$	9.5		21.0	%
Tax-exempt interest and dividends received deduction	(0.7		)	(5.3	)	(0.5		)	(1.3	)	(2.1		)	(3.1	)	(1.7		)	(3.8	)
Other, net	(0.8		)	(6.3	)	(0.5		)	(1.1	)	0.1			—		0.3			0.6
Federal income tax expense	1.2			9.4	%	7.6			18.6	%	12.0			17.9	%	$	8.1		17.8	%

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Investments (Tables)

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Cost or Amortized Cost and Fair Value of Available-for-Sale Securities

The following tables set forth the cost or amortized cost and fair value of investments by lot at September 30, 2019 and December 31, 2018:

($ millions)	Cost or amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Fair value
September 30, 2019
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	516.4	$	14.8	$	(1.2	)	$	530.0
Obligations of states and political subdivisions	415.3		21.8		—			437.1
Corporate securities	492.3		10.9		(1.1		)	502.1
U.S. government agencies mortgage-backed securities	705.0		18.2		(3.1		)	720.1
Total available-for-sale fixed maturities	$	2,129.0	$	65.7	$	(5.4	)	$	2,189.3
($ millions)	Cost or amortized cost		Gross unrealized holding gains		Gross unrealized holding losses			Fair value
December 31, 2018
Available-for-sale fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	438.4	$	3.2	$	(9.2	)	$	432.4
Obligations of states and political subdivisions	408.2		7.3		(0.9		)	414.6
Corporate securities	551.7		0.6		(11.7		)	540.6
U.S. government agencies mortgage-backed securities	789.9		3.3		(21.3		)	771.9
Total available-for-sale fixed maturities	$	2,188.2	$	14.4	$	(43.1	)	$	2,159.5

Gross Unrealized Losses and Fair Value on its Investments

The following tables set forth the Company’s gross unrealized losses and fair value on its investments by lot, aggregated by investment category and length of time for individual securities that have been in a continuous unrealized loss position at September 30, 2019 and December 31, 2018:

($ millions, except # of positions)	Less than 12 months						12 months or more						Total
	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions
September 30, 2019
Fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	41.1	$	(0.1	)	9	$	184.5	$	(1.1	)	16	$	225.6	$	(1.2	)	25
Obligations of states and political subdivisions	—		—			—	4.1		—			1	4.1		—			1
Corporate securities	20.3		(0.3		)	2	56.9		$	(0.8	)	9	77.2		$	(1.1	)	11
U.S. government agencies mortgage-backed securities	50.9		(0.3		)	7	161.1		(2.8		)	35	212.0		(3.1		)	42
Total temporarily impaired securities	$	112.3	$	(0.7	)	18	$	406.6	$	(4.7	)	61	$	518.9	$	(5.4	)	79
($ millions, except # of positions)	Less than 12 months						12 months or more						Total
	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions	Fair value		Unrealized losses			Number of positions
December 31, 2018
Fixed maturities:
U.S. treasury securities and obligations of U.S. government agencies	$	83.1	$	(1.8	)	7	$	259.6	$	(7.4	)	35	$	342.7	$	(9.2	)	42
Obligations of states and political subdivisions	63.6		(0.5		)	7	39.6		(0.4		)	8	103.2		(0.9		)	15
Corporate securities	244.0		(3.0		)	31	189.5		(8.7		)	30	433.5		(11.7		)	61
U.S. government agencies mortgage-backed securities	169.5		(2.8		)	18	385.5		(18.5		)	70	555.0		(21.3		)	88
Total temporarily impaired securities	$	560.2	$	(8.1	)	63	$	874.2	$	(35.0	)	143	$	1,434.4	$	(43.1	)	206

Amortized Cost and Fair Value of Available-for-Sale Fixed Maturities by Contractual Maturity

The following table sets forth the amortized cost and fair value of available-for-sale fixed maturities by contractual maturity at September 30, 2019:

($ millions)	Amortized cost		Fair value
Due in 1 year or less	$	55.7	$	56.6
Due after 1 year through 5 years	562.7		569.4
Due after 5 years through 10 years	239.9		249.7
Due after 10 years	565.7		593.5
U.S. government agencies mortgage-backed securities	705.0		720.1
Total	$	2,129.0	$	2,189.3

Components of Net Investment Income

The following table sets forth the components of net investment income for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30				Nine months ended September 30
	2019		2018		2019		2018
Fixed maturities	$	15.3	$	16.4	$	47.7	$	49.4
Equity securities	3.0		3.0		8.9		8.6
Cash and cash equivalents, and other	1.1		1.7		4.2		5.2
Investment income	19.4		21.1		60.8		63.2
Investment expenses	0.1		0.3		0.4		1.0
Net investment income	$	19.3	$	20.8	$	60.4	$	62.2

Realized and Unrealized Holding Gains (Losses)

The following table sets forth the realized and unrealized holding gains (losses) on the Company’s investment portfolio for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Investment gains (losses), net:
Fixed maturities:
Realized gains on sales of securities	1.2			—			2.8			1.7
Net gains on fixed maturities	1.2			—			2.8			1.7
Equity securities:
Realized (losses) gains on sales of securities, net	(1.8		)	1.0			(2.5		)	5.4
Unrealized (losses) gains on securities still held, net	(4.1		)	16.4			46.4			12.8
Net (losses) gains on equity securities	(5.9		)	17.4			43.9			18.2
Other invested assets:
Unrealized (losses) gains on securities still held, net	(0.3		)	0.4			4.8			(1.7		)
Net (losses) gains on other invested assets	(0.3		)	0.4			4.8			(1.7		)
Other net realized loss	—			—			(1.3		)	—
Net (losses) gains on investments	$	(5.0	)	$	17.8		$	50.2		$	18.2
Change in unrealized holding gains (losses), net of tax:
Fixed maturities	$	21.4		$	(14.7	)	$	89.0		$	(63.3	)
Deferred federal income tax (liability) benefit	(4.5		)	3.1			(18.7		)	13.3
Change in net unrealized holding gains (losses), net of tax	$	16.9		$	(11.6	)	$	70.3		$	(50.0	)

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Financial Information Regarding Company's Reportable Segments

The following table sets forth financial information regarding the Company’s reportable segments and specialty run-off for the three and nine months ended September 30, 2019 and 2018:

($ millions)	Three months ended September 30						Nine months ended September 30
	2019			2018			2019			2018
Revenue from external sources:
Insurance operations
Personal insurance	$	192.7		$	173.0		$	562.5		$	494.2
Commercial insurance	127.0			115.2			361.4			345.7
Specialty run-off	(0.1		)	18.6			6.1			89.3
Total insurance operations	319.6			306.8			930.0			929.2
Investment operations
Net investment income	19.3			20.8			60.4			62.2
Net investment (loss) gain	(5.0		)	17.8			50.2			18.2
Total investment operations	14.3			38.6			110.6			80.4
All other	0.6			0.6			1.6			1.8
Total revenue from external sources	334.5			346.0			1,042.2			1,011.4
Intersegment revenue	1.7			1.6			4.9			4.8
Total revenue	336.2			347.6			1,047.1			1,016.2
Reconciling items:
Eliminate intersegment revenue	(1.7		)	(1.6		)	(4.9		)	(4.8		)
Total consolidated revenues	$	334.5		$	346.0		$	1,042.2		$	1,011.4
Segment (loss) income before federal income tax:
Insurance operations SAP underwriting (loss) gain
Personal insurance	$	(6.3	)	$	6.9		$	(32.0	)	$	(4.6	)
Commercial insurance	1.2			(5.2		)	(17.1		)	(22.3		)
Specialty run-off	(0.6		)	1.9			(1.3		)	4.5
Total insurance operations	(5.7		)	3.6			(50.4		)	(22.4		)
Investment operations
Net investment income	19.3			20.8			60.4			62.2
Net investment (loss) gain	(5.0		)	17.8			50.2			18.2
Total investment operations	14.3			38.6			110.6			80.4
All other	—			0.1			0.2			0.3
Total segment income before reconciling items	8.6			42.3			60.4			58.3
Reconciling items:
GAAP expense adjustments	7.2			0.8			17.3			(2.6		)
Interest expense on corporate debt	(1.2		)	(1.2		)	(3.7		)	(4.5		)
Corporate expenses	(1.9		)	(0.9		)	(7.3		)	(5.8		)
Total reconciling items	4.1			(1.3		)	6.3			(12.9		)
Total consolidated income before federal income tax	$	12.7		$	41.0		$	66.7		$	45.4

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Other Comprehensive Income and Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Other Comprehensive Income and Accumulated Other Comprehensive Income

Other Comprehensive Income and Accumulated Other Comprehensive Loss

The following tables set forth the changes in the Company’s accumulated other comprehensive (loss) income ("AOC(L)I"), net of tax, for the three and nine months ended September 30, 2019 and 2018:

($ millions)		Unrealized Gains and Losses on Available-for-Sale  Securities			Benefit Plan Items			Total
Beginning balance at July 1, 2019		$	33.2		$	(74.9	)	$	(41.7	)
Other comprehensive income before reclassifications		17.8			—			17.8
Amounts reclassified from AOCI (a)		(0.9		)	0.6			(0.3		)
Net current period other comprehensive income		16.9			0.6			17.5
Ending balance at September 30, 2019		$	50.1		$	(74.3	)	$	(24.2	)
Beginning balance at July 1, 2018		$	(20.3	)	$	(75.5	)	$	(95.8	)
Other comprehensive loss before reclassifications		(11.6		)	—			(11.6		)
Amounts reclassified from AOCI (a)		—			1.3			1.3
Net current period other comprehensive (loss) income		(11.6		)	1.3			(10.3		)
Ending balance at September 30, 2018		$	(31.9	)	$	(74.2	)	$	(106.1	)
(a)	See separate table below for details about these reclassifications

($ millions)		Unrealized Gains and Losses on Available-for-Sale  Securities			Benefit Plan Items			Total
Beginning balance at January 1, 2019		$	(20.2	)	$	(76.2	)	$	(96.4	)
Other comprehensive income before reclassifications		72.5			—			72.5
Amounts reclassified from AOCI (a)		(2.2		)	1.9			(0.3		)
Net current period other comprehensive income		70.3			1.9			72.2
Ending balance at September 30, 2019		$	50.1		$	(74.3	)	$	(24.2	)
Beginning balance at January 1, 2018		$	66.0		$	(62.2	)	$	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		(47.9		)	(16.0		)	(63.9		)
Other comprehensive loss before reclassifications		(48.7		)	—			(48.7		)
Amounts reclassified from AOCI (a)		(1.3		)	4.0			2.7
Net current period other comprehensive (loss) income		(50.0		)	4.0			(46.0		)
Ending balance at September 30, 2018		$	(31.9	)	$	(74.2	)	$	(106.1	)
(a)	See separate table below for details about these reclassifications

The following tables set forth the reclassifications out of accumulated other comprehensive income, by component, to the Company’s condensed consolidated statement of income for the three and nine months ended September 30, 2019 and 2018:

($ millions)
Details about Accumulated Other		Three months ended September 30						Affected line item in the Condensed
Comprehensive Income Components								Consolidated Statements of Income
		2019			2018
Unrealized gains on available-for-sale fixed maturity investments		$	1.2		$	—		Realized gains on sale of securities
		1.2			—			Total before tax
		(0.3		)	—			Tax expense
		0.9			—			Net of tax
Amortization of benefit plan items
Negative prior service cost		1.6			1.6			(b)
Net actuarial loss		(2.4		)	(3.3		)	(b)
		(0.8		)	(1.7		)	Total before tax
		0.2			0.4			Tax benefit
		(0.6		)	(1.3		)	Net of tax
Total reclassifications for the period		$	0.3		$	(1.3	)
(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).

($ millions)
Details about Accumulated Other		Nine months ended September 30						Affected line item in the Condensed
Comprehensive Income Components								Consolidated Statements of Income
		2019			2018
Unrealized gains on available-for-sale fixed maturity investments		$	2.8		$	1.7		Realized gain on sale of securities
		2.8			1.7			Total before tax
		(0.6		)	(0.4		)	Tax expense
		2.2			1.3			Net of tax
Amortization of benefit plan items
Negative prior service cost		4.8			4.8			(b)
Net actuarial loss		(7.2		)	(9.9		)	(b)
		(2.4		)	(5.1		)	Total before tax
		0.5			1.1			Tax benefit
		(1.9		)	(4.0		)	Net of tax
Total reclassifications for the period		$	0.3		$	(2.7	)
(b)	These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see pension and postretirement benefit plans footnote for additional details).

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Losses and Loss Expenses Payable Losses and Loss Expenses Payable

9 Months Ended

Sep. 30, 2019

Losses and Loss Expenses Payable [Abstract]

Liability for Future Policy Benefits and Unpaid Claims Disclosure [Text Block]

. Losses and Loss Expenses Payable

The following table sets forth the activity in the liability for losses and loss expenses for the nine months ended September 30, 2019 and 2018:

($ millions)	2019			2018
Losses and loss expenses payable, at beginning of period	$	1,146.8		$	1,255.6
Less: reinsurance recoverable on losses and loss expenses payable	5.5			3.1
Net balance at beginning of period	1,141.3			1,252.5
Incurred related to:
Current year	692.7			678.7
Prior years	(55.1		)	(57.6		)
Total incurred	637.6			621.1
Paid related to:
Current year	366.4			314.1
Prior years	327.0			365.8
Total paid	693.4			679.9
Net balance at end of period	1,085.5			1,193.7
Plus: reinsurance recoverable on losses and loss expenses payable	7.2			5.0
Losses and loss expenses payable, at end of period	$	1,092.7		$	1,198.7

The Company recorded favorable development related to prior years’ loss and loss expense reserves for the nine months ended September 30, 2019, of $55.1 million compared to favorable development of $57.6 million for the same 2018 period. Favorable development of prior accident years' non-catastrophe loss and ALAE reserves for the nine months ended September 30, 2019 was $54.1 million. In the personal insurance segment, personal auto contributed $11.0 million of favorable development. In the commercial insurance segment, all lines contributed favorable development, with workers' compensation, small commercial package, and middle market commercial contributing $13.4 million, $11.8 million, and $7.2 million, respectively.

For the nine months ended September 30, 2018, favorable development of prior accident years' non-catastrophe loss and ALAE reserves was primarily due to $56.4 million of favorable development in the personal and commercial insurance segments. In the personal insurance segment, personal auto contributed $18.5 million of favorable development and homeowners contributed $7.2 million of favorable development. In the commercial insurance segment all lines contributed favorable development, with workers' compensation, small commercial package and commercial auto contributing $8.4 million, $6.5 million, and $5.7 million, respectively. Slightly offsetting the favorable development was adverse development in the specialty insurance segment of $4.1 million. The specialty insurance segment was impacted by $3.4 million and $0.9 million of adverse development in E&S casualty and programs, respectively.

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Fair Value of Financial Instruments - Included in Notes Payable are the FHLB loan and Subordinated Debentures (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Document Period End Date	Sep. 30, 2019
Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Interest rate (percent)	1.73%	1.73%
FHLB loan due and issued with fixed interest, Senior notes due and issued with fixed interest and Affiliate subordinated debentures due with variable interest	$ 21,500,000
Federal Home Loan Bank of Cincinnati [Member]
Debt Instrument [Line Items]
FHLB loan due and issued with fixed interest, Senior notes due and issued with fixed interest and Affiliate subordinated debentures due with variable interest	$ 85,000,000
Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Interest rate (percent)	3.96%	3.96%
Affiliate Subordinated Debentures Due 2033 [Member]
Debt Instrument [Line Items]
Interest rate (percent)	6.33%	6.94%
FHLB loan due and issued with fixed interest, Senior notes due and issued with fixed interest and Affiliate subordinated debentures due with variable interest	$ 15,500,000.0
Reported Value Measurement [Member]
Debt Instrument [Line Items]
Total notes payable	122,000,000.0	$ 122,000,000.0
Reported Value Measurement [Member] | Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Total notes payable	21,500,000	21,500,000
Reported Value Measurement [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Total notes payable	85,300,000	85,300,000
Reported Value Measurement [Member] | Affiliate Subordinated Debentures Due 2033 [Member]
Debt Instrument [Line Items]
Total notes payable	15,200,000	15,200,000
Estimate of Fair Value Measurement [Member]
Debt Instrument [Line Items]
Total notes payable	136,800,000	125,100,000
Estimate of Fair Value Measurement [Member] | Federal Home Loan Bank Advances [Member]
Debt Instrument [Line Items]
Total notes payable	21,500,000	20,900,000
Estimate of Fair Value Measurement [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Total notes payable	100,100,000	89,000,000.0
Estimate of Fair Value Measurement [Member] | Affiliate Subordinated Debentures Due 2033 [Member]
Debt Instrument [Line Items]
Total notes payable	$ 15,200,000	$ 15,200,000

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Investments - Cost or Amortized Cost and Fair Value of Available-for-Sale Securities (Detail) - USD ($) $ in Millions	Sep. 30, 2019	Dec. 31, 2018
Debt Securities, Available-for-sale [Line Items]
Cost or amortized cost	$ 2,129.0	$ 2,188.2
Gross unrealized holding gains	65.7	14.4
Gross unrealized holding losses	(5.4)	(43.1)
Fair value	2,189.3	2,159.5
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Debt Securities, Available-for-sale [Line Items]
Cost or amortized cost	516.4	438.4
Gross unrealized holding gains	14.8	3.2
Gross unrealized holding losses	(1.2)	(9.2)
Fair value	530.0	432.4
Obligations of States and Political Subdivisions [Member]
Debt Securities, Available-for-sale [Line Items]
Cost or amortized cost	415.3	408.2
Gross unrealized holding gains	21.8	7.3
Gross unrealized holding losses	0.0	(0.9)
Fair value	437.1	414.6
Corporate Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Cost or amortized cost	492.3	551.7
Gross unrealized holding gains	10.9	0.6
Gross unrealized holding losses	(1.1)	(11.7)
Fair value	502.1	540.6
U.S. Government Agencies Mortgage-Backed Securities [Member]
Debt Securities, Available-for-sale [Line Items]
Cost or amortized cost	705.0	789.9
Gross unrealized holding gains	18.2	3.3
Gross unrealized holding losses	(3.1)	(21.3)
Fair value	$ 720.1	$ 771.9

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Investments - Realized and Unrealized Holding Gains (Losses) (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Debt Securities, Realized Gain (Loss):
Debt Securities, Available-for-sale, Realized Gain	$ 1.2	$ 0.0	$ 2.8	$ 1.7
Debt Securities, Available-for-sale, Net Realized Gain (Loss)	1.2	0.0	2.8	1.7
Equity Securities, FV-NI, Gain (Loss)
Other net realized loss	0.0	0.0	1.3	0.0
Gain (Loss) on Investments	(5.0)	17.8	50.2	18.2
Change in unrealized holding gains (losses), net of tax:
Change in net unrealized holding (losses) gains, net of tax	21.4	(14.7)	89.0	(63.3)
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, Tax	(4.5)	3.1	(18.7)	13.3
Total net unrealized holding gain (loss) on available-for-sale investments	16.9	(11.6)	70.3	(50.0)
Equity Securities [Member]
Equity Securities, FV-NI, Gain (Loss)
Equity Securities, FV-NI, Realized Gain (Loss)	(1.8)	1.0	(2.5)	5.4
Equity Securities, FV-NI, Unrealized Gain (Loss)	(4.1)	16.4	46.4	12.8
Equity Securities, FV-NI, Net Gain (Loss)	(5.9)	17.4	43.9	18.2
Other Invested Assets [Member]
Equity Securities, FV-NI, Gain (Loss)
Equity Securities, FV-NI, Unrealized Gain (Loss)	(0.3)	0.4	4.8	(1.7)
Equity Securities, FV-NI, Net Gain (Loss)	$ (0.3)	$ 0.4	$ 4.8	$ (1.7)

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Segment Information - Financial Information Regarding Company's Reportable Segments (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenues from external sources:
Revenue	$ 334.5	$ 346.0	$ 1,042.2	$ 1,011.4
Other Income	0.6	0.6	1.6	1.8
Net Investment Income	19.3	20.8	60.4	62.2
Realized Investment Gains (Losses)	(5.0)	17.8	50.2	18.2
Segment income before federal income tax:
Interest expense on corporate debt	(1.2)	(1.2)	(3.7)	(4.5)
Income before federal income taxes	12.7	41.0	66.7	45.4
Operating Segments [Member]
Revenues from external sources:
Revenue	334.5	346.0	1,042.2	1,011.4
Segment income before federal income tax:
Income before federal income taxes	8.6	42.3	60.4	58.3
Operating Segments [Member] | Personal Insurance Segments [Member]
Revenues from external sources:
Revenue	192.7	173.0	562.5	494.2
Operating Segments [Member] | Business Insurance Segments [Member]
Revenues from external sources:
Revenue	127.0	115.2	361.4	345.7
Operating Segments [Member] | Specialty Insurance Segment [Member]
Revenues from external sources:
Revenue	(0.1)	18.6	6.1	89.3
Operating Segments [Member] | Total Insurance Segments [Member]
Revenues from external sources:
Revenue	319.6	306.8	930.0	929.2
Segment income before federal income tax:
Income before federal income taxes	(5.7)	3.6	(50.4)	(22.4)
Operating Segments [Member] | Net Investment Income [Member]
Revenues from external sources:
Net Investment Income	19.3	20.8	60.4	62.2
Operating Segments [Member] | Total Investment Operations [Member]
Revenues from external sources:
Revenue	14.3	38.6	110.6	80.4
Segment income before federal income tax:
Income before federal income taxes	14.3	38.6	110.6	80.4
Operating Segments [Member] | Total Investment Operations [Member] | Net Realized Capital Gains [Member]
Segment income before federal income tax:
Income before federal income taxes	(5.0)	17.8	50.2	18.2
Operating Segments [Member] | All Other Segments [Member]
Revenues from external sources:
Revenue		0.6		1.8
Segment income before federal income tax:
Income before federal income taxes	0.0	0.1	0.2	0.3
Operating Segments [Member] | Personal Insurance [Member]
Segment income before federal income tax:
Income before federal income taxes	(6.3)	6.9	(32.0)	(4.6)
Operating Segments [Member] | Business Insurance [Member]
Segment income before federal income tax:
Income before federal income taxes	1.2	(5.2)	(17.1)	(22.3)
Operating Segments [Member] | Specialty Insurance [Member]
Segment income before federal income tax:
Income before federal income taxes	(0.6)	1.9	(1.3)	4.5
Eliminate Intersegment Revenues [Member]
Revenues from external sources:
Revenue	1.7	1.6	4.9	4.8
Segment Reconciling Items [Member]
Revenues from external sources:
Revenue	(1.7)	(1.6)	(4.9)	(4.8)
Segment income before federal income tax:
Corporate Expenses	(1.9)	(0.9)	(7.3)	(5.8)
Income before federal income taxes	4.1	(1.3)	6.3	(12.9)
Segment Reconciling Items [Member] | Segment Reconciling Items [Member]
Segment income before federal income tax:
Gaap Expense Adjustments	7.2	0.8	17.3	(2.6)
Interest expense on corporate debt	1.2	1.2	3.7	4.5
Corporate And Reconciling Items [Member]
Revenues from external sources:
Revenue	$ 336.2	$ 347.6	$ 1,047.1	$ 1,016.2