New York, January 22, 2015 -- Moody's Investors Service has placed the A3 insurance financial strength (IFS) ratings of members of the State Automobile Mutual Group (State Auto) and State Auto Financial Corporation (STFC) on review for downgrade following the announcement that STFC will strengthen reserves by approximately $72 million pre-tax in the fourth quarter of 2014. The reserve charge primarily relates to two runoff programs, restaurant and commercial trucking, which were written by the company's Risk Evaluation & Design (RED) subsidiary. State Auto also entered into an adverse development cover which provides $40 million in coverage to protect against further development on RED's restaurant program in excess of carried reserves.
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