874977--3/13/2009--State_Auto_Financial

related topics

{stock, price, operating}

{loss, insurance, financial}

{condition, economic, financial}

{operation, natural, condition}

{product, market, service}

{capital, credit, financial}

{loan, real, estate}

{competitive, industry, competition}

{system, service, information}

{personnel, key, retain}

{regulation, government, change}

{product, liability, claim}

{acquisition, growth, future}

If our estimated liability for losses and loss expenses is incorrect, our reserves may be inadequate to cover our ultimate liability for losses and loss expenses and may have to be increased. CATASTROPHE LOSSES AND GEOGRAPHIC CONCENTRATIONS The occurrence of catastrophic events could materially reduce our profitability. Our financial results depend primarily on our ability to underwrite risks effectively and to charge adequate rates to policyholders. Reinsurance may not be available or adequate to protect us against losses. CYCLICAL NATURE OF THE INDUSTRY The property and casualty insurance industry is highly cyclical, which may cause fluctuations in our operating results. The current and future difficult economic conditions can adversely affect our business, results of operations and financial condition. Adverse capital and credit market conditions may negatively affect our ability to meet unexpected liquidity needs or to obtain credit on acceptable terms. The independent agency system is the distribution system for our products. Use of this distribution system may constrain our ability to grow at a comparable pace to our competitors that utilize multiple distribution channels. In addition, consumers may prefer to purchase insurance products through alternative channels, such as through the internet, rather than through agents. Our business is heavily regulated, and changes in regulation may reduce our profitability and limit our growth. Developing claim and coverage issues in our industry are uncertain and may adversely affect our insurance operations. Terrorist attacks, and the threat of terrorist attacks, and ensuing events could have an adverse effect on us. Our development of business insurance lines automated underwriting tools may not be successful or the benefits may not be realized. In addition our business success and profitability depend, in part, on effective information technology systems and facilities. If we are unable to keep pace with the rapidly developing technological advancements in the insurance industry, our ability to compete effectively could be impaired. The performance of our investment portfolios is subject to investment risks. Our ability to attract, develop and retain talented employees, managers and executives, and to maintain appropriate staffing levels, is critical to our success. Our business depends on the uninterrupted operation of our facilities, systems and business functions, including our information technology and other business systems. Acquisitions subject us to a number of financial and operational risks. A downgrade in our financial strength ratings may negatively affect our business. CONTROL BY OUR PARENT COMPANY Our parent company owns a significant interest in us and may exercise its control in a manner detrimental to your interests. Our industry is highly competitive, which could adversely affect our sales and profitability. VOLATILITY OF OUR COMMON STOCK The price of our common stock could be volatile.

Full 10-K form ▸

874977--3/13/2009--State_Auto_Financial_CORP