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UPDATE 1-State Auto Financial sees higher Q2 catastrophe losses

Tue Jul 8, 2008 7:18am EDT

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July 8 (Reuters) - Property and casualty insurance holding company State Auto Financial Corp (STFC.O) said its second-quarter results will be hurt by higher-than-expected catastrophe losses stemming from 16 different storms.

The company expects second-quarter results to include $76 million to $84 million in pretax catastrophe losses, a four-fold increase from catastrophe losses recorded in the year-ago quarter.

The loss forecast includes $3.4 million related to adverse development from prior periods, the company said in a statement.

Catastrophe activity hit 26 of the 33 states the company operates in.

"Unfortunately the unusually harsh storm activity we saw in the first quarter this year has continued into the second quarter," Chief Executive Bob Restrepo said.

Analysts expect the company to earn 50 cents a share for the second quarter, excluding items, according to Reuters Estimates. (Reporting by Sweta Singh in Bangalore; Editing by Bernard Orr)

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