STATE AUTO FINANCIAL CORPORATION SEPTEMBER 2018 1 SAFE HARBOR - PowerPoint PPT Presentation

STATE AUTO FINANCIAL CORPORATION SEPTEMBER 2018 1

SAFE HARBOR FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “estimate,” “target,” and similar expressions, among others, identify forward-looking statements. All forward-looking statements are based on assumptions, expectations and other information currently available to management. Such forward-looking statements are subject to certain risks and uncertainties that could cause the Company’s actual results to differ materially from those projected, anticipated or implied. The most significant of these risk and uncertainties are described in STFC’s most recently filed Annual Report on Form 10-K and its other filings with the Securities and Exchange Commission. STFC undertakes no obligation to update or revise any forward-looking statements. 2

STATE AUTO FINANCIAL CORPORATION REGIONAL PROPERTY AND CASUALTY INSURER $1.3 billion in 2017 annual net written premiums; 51% personal, 33% commercial ● and 16% specialty (in run-off) Insurance products distributed through non-exclusive insurance agents and ● brokers NASDAQ: STFC 60% OWNED BY STATE AUTOMOBILE MUTUAL (SAM) $2.0 billion in State Auto Group 2017 annual net written premiums subject to ● intercompany pooling arrangement STFC currently retains 65% of the pool ● RATED A- (EXCELLENT) BY A.M. BEST 3

STATE AUTO GROUP ORGANIZATION State Automobile Mutual Insurance Company Public Investors 60% State Auto Financial Rockhill Insurance Group Insurance Subsidiaries Corporation 40% Insurance Subsidiaries Insurance Subsidiaries Insurance company members of the State Auto Group participate in an intercompany reinsurance pooling arrangement. STFC-owned insurance companies share in 65% of the pool. 4

PRODUCT LINES GO-FORWARD PRODUCT LINES EXITED PRODUCT LINES Personal Insurance Specialty Insurance Personal Auto E&S Property Homeowners E&S Casualty Dwelling Fire Programs Personal Umbrella Commercial Insurance Business Owners Program Commercial Package Commercial Auto Commercial Property Commercial Liability Workers’ Compensation Farm & Ranch 5

SEGMENT AND PRODUCT MIX DEC. 31, 2017 NWP BY SEGMENT NWP BY LINE OF BUSINESS 6

Technology Products Culture WHAT Data analytics WE’VE DONE Focus/ Strategy Alignment People Distribution 7

FINANCIAL OVERVIEW 2015 2016 2017 YTD 2018 Net premiums written $ 1,266.1 1,294.1 1,270.3 600.3 Total revenue $ 1,373.9 1,404.6 1,422.3 665.4 Net income (loss) $ 52.2 19.2 (10.7) 3.9 Diluted EPS $ 1.26 0.46 (0.25) 0.09 Dividends paid/share $ 0.40 0.40 0.40 0.20 Book value/share $ 21.24 21.17 20.63 19.75 Return on equity 6.0% 2.2% (1.2)% (1.9)% Combined ratio 101.1% 106.3% 107.8% 104.8% 8

GAAP COMBINED RATIO 9

INVESTMENT PORTFOLIO June 30, 2018 Mix Total $2.7 Billion (Market Value) Fixed Income 81.6% Equities 13.6% Other 4.8% Total 100.0% Bond Ratings* AAA 2.6% AA** 61.4% A 18.3% BBB 17.5% Below investment grade 0.2% Average Maturity 7.1 years Duration 4.3 Pre-Tax Yield 3.1% Total 100.0% * Based on ratings by nationally recognized rating agencies, excluding any credit enhancements. 10 ** Our AA rating category includes securities which have been pre-refunded or escrowed to maturity.

BOOK AND MARKET VALUE PER SHARE 11