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State Auto Financial Boosts Loss Reserves

Michael Dunn

State Auto Financial(STFC Quote) will raise its fourth-quarter loss reserves by $30 million to $33 million.

The adjustments, coming on claims of the former Meridian Insurance Co., are expected to reduce fourth-quarter and year-end after-tax earnings by 50 cents to 55 cents a share.

The insurance holding company said it became aware that the magnitude of the case deficiency of case reserve adjustments was greater than it first appeared and the company has accelerated its efforts to fix that deficiency.

Shares of STFC closed at $14.20 Friday on the Nasdaq before the announcement.