State Auto Financial Corp. eked out a small profit in the second quarter, with rate hikes helping its bottom line. At the same time, the Ohio-based insurer struggled with a combined ratio well above 100 as it dealt with a jump in catastrophe losses.

Net income was $6 million, or $0.14 per diluted share, versus $8.7 million, or $0.21 per diluted share in the 2017 second quarter.

According to State Auto, the combined ratio inched higher to 107 for the 2018 second quarter compared to 106.2 for the same year-ago period. Catastrophe losses accounted for 12.2 points of the 70.8 total loss ratio ($37.5 million) compared to just under eight points of the total 71.9 loss ratio points ($25.2 million) in Q2 2017.

Chairman, President and CEO Mike LaRocco said in prepared remarks that the insurer is, in fact, making progress in areas such as personal auto, which “was both profitable and growing.” To get to that point took about three years, which LaRocco said was successful with the help of the insurer’s agency partners.

LaRocco said that further improvements are coming down the line, stemming largely from the completed digital rollout for commercial auto and small commercial package by the end of September.

“We expect to see the benefit of these changes in these lines in the last half of this year, increasing over the coming years,” LaRocco said.

The insurer said its net premiums written for Q2 dipped 9.7 percent versus the same period in 2017. Broken down further, the number grew 23 percent and 2.8 percent, respectively, for State Auto’s personal and commercial segments during the quarter. Personal auto saw price hikes, new business growth and more policies in force than during the 2017 second quarter. Commercial segment improvement stemmed from rate increases and new business in commercial auto, middle-market commercial, and farm and ranch. Countering that was specialty insurance, which declined to almost nothing as State Auto exited the business.

Here are further result highlights:

• Consolidated net premiums written were $308 million during the quarter, down from $341.3 million in the 2017 second quarter.
• Consolidated net premiums earned were at $307.5 million, down from $320.1 million the year before.
• Net investment income landed at $21.5 million, better than the $19.1 million generated a year ago.

Source: State Auto Financial Corp.