State Auto Financial Named ``Best Managed Insurance Company' By Forbes

State Auto Financial Corporation (NASDAQ:STFC) has been named by Forbes Magazine as its Best Managed Company in the insurance industry for the year 2006. The January 9, 2006 issue of the magazine lists STFC among the 26 “Best Managed Companies in America.” “The best managed companies,” writes Forbes, “were culled from an exhaustive search of more than 1,000 publicly traded companies that have at least $1 billion in sales, positive book value and a price of at least $5 (per share).” Forbes uses Audit Integrity, a financial analytics firm, to develop an overall score on each company based on accounting and governance practices, financial condition and earnings quality. The list is eventually reduced to the Platinum 400, also known as Forbes’ Best Big Companies in America, a distinction which STFC has earned for a second straight year. According to Forbes, “Once we narrowed down our universe to exactly 400 companies, our editors and writers evaluated the leading companies in each industry on factors such as innovation, efficiency and market leadership. Through additional objective and subjective analysis, they selected the best-managed company in each of 26 industries.”

STFC’s Chairman and CEO Bob Moone was interviewed for the January 9 issue of Forbes and is pictured on page 114 astride his now famous three-legged stool, each leg representing the company’s fundamental performance factors: underwriting profit, premium growth and expense control. Minus any factor (leg), the stool cannot stand. Forbes noted that “Every year since its public offering in 1991, State Auto’s combined ratio (premium income divided by claims and related expenses) has beaten the industry average by a wide margin. Earnings-per-share growth in the past 12 months was 47%, return on capital 16%.”

Moone stated, “On behalf of all State Auto associates and the 22,000 independent agents who make up our only distribution system, we are proud to have earned this recognition. STFC’s commitment to unrelenting attention to and execution of the fundamentals of our business has led to sustained positive return on capital, sales and earnings growth. Our selection as the Best Managed Company in the insurance industry places State Auto among an elite group of insurers.”

State Auto Financial Corporation, headquartered in Columbus, Ohio, is a property and casualty insurance holding company engaged primarily in writing both personal and commercial lines of insurance. The company markets its products through nearly 22,000 independent insurance agents associated with more than 3,100 agencies in 26 states. The State Auto Insurance Companies are rated A+ (Superior) by the A.M. Best Company. Additional information on the company can be found on its web page at

Except for historical information, all other information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. The most significant of these uncertainties are described in State Auto Financial’s Form 10-K and Form 10-Q reports and exhibits to those reports, and include (but are not limited to) legislative changes at both the state and federal level, state and federal regulatory rule making promulgations and adjudications, class action litigation involving the insurance industry and judicial decisions affecting claims, policy coverages and the general costs of doing business, the impact of competition on products and pricing, inflation in the costs of the products and services insurance pays for, product development, geographic spread of risk, weather-related events, and other types of catastrophic events. State Auto Financial undertakes no obligation to update or revise any forward-looking statements.