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A financial packet containing reconciliations of certain non-GAAP measures, along with supplemental financial information was distributed to registered participants prior to this call and made available to all interested parties on our website www.stateauto.com under the investors section as an attachment to the press release.Now, I'll turn the call over to STFC's Chairman, President and CEO, Bob Restrepo. Bob Restrepo Thank you, Steve and good morning. Despite solid ex-catastrophe results in most lines, we're disappointed with your combined ratio of 109.4% and a modest loss of $2 million, or $0.05 a share. State Auto Financial Corporation's book value settled in at $18.16, which is an increase of $0.21 per share from our restated book value at year end. Our current book value includes a reduction of $2.49 a share for a deferred tax asset valuation allowance, which we continue to carry. The first quarter is shaping up as a relatively light catastrophe quarter for the industry and for State Auto with on significant exception. Last year tornados, wind and hail loss that had Midwest in March 2 nd and 3 rd, had a significant impact on our first quarter results and caused widespread damage in four of our five largest states, Kentucky, Indiana, Ohio and Tennessee. For State Auto this catastrophe was similar to the storm that devastated Tuscaloosa, Alabama last year. First it was widespread and had a high frequency of severe tornados with accompanying wind and hail. Second, they caused a much higher frequency of commercial property losses resulting in greater overall loss severity. And third, it triggered a recovery under our property catastrophe treaty. As a reminder, our attachment point under the treaty is $55 million. All-in this event which the property claim services organization, or PCS, identified identify that cat number 67 resulted in a $21.6 million loss for STFC, that are recoveries from both, our homeowners' quota share treaty and a catastrophe treaty.
The quota share treaty operated as intended by minimizing the impact on our earnings and capital reducing our overall underwriting loss by $7.1 million, and producing a net benefit to our combined ratio of 1.1%. The catastrophe loss ratio improved 4.8 percentage points, but our non-cat loss ratio results were up 2.9 percentage points due to the ceded premium impact on our overall results. It also added another eight-tenth of a point to our expense ratio.Catastrophe results has generally solid quarter, it was marred only by reserve strengthening and the Specialty segment to cover run-off of a terminated commercial automobile program written by our managing general underwriting affiliate, RED. Business from this program began running off on 1 April. And, personal insurance, personal auto results remain profitable despite a higher frequency of hourly entry losses. We expect results to improve. We're getting pricing increases in excess of loss cost and retention is sound all of which will improve margins in our larger clients. Production is down a bit, primarily in our core states of Indiana, Kentucky, Ohio and Tennessee. As we've reported previously, our personal lines business is heavily cross-sold. Homeowners actually have affected personal auto production, particularly in catastrophe prone states. We've also terminated relationships with underperforming personal lines agencies in our core states. This will affect both, our retention and new business for the rest of the year. Outside of cat exposed states, personal auto production is good and we continue to diversify our geographic footprint beyond the Midwest. In homeowners, we continue to improve our ex-catastrophe results despite elevated trends of non-catastrophe weather-related losses in the quarter. We're on track to exceed our rate plan of 15% for the year. Price increase vary by state with the largest increases targeted at our most unprofitable states. Prices will increase at least 20% in most of our core states, where we've had the poorest results. We're also filing for higher mandatory wind and hail deductibles. We previously implemented $1,000 deductibles in 16 states, which account for over 75% of our wind and hail losses. We're now increasing those deductibles in 11 of our most cat-prone states to 1% of the building replacement value, subject to a maximum of a $2,500 deductible. Read the rest of this transcript for free on seekingalpha.com