Fundamentals

Key Ratios

GAAP Ratios (unaudited) Quarter Ended December 31,
Year Ended December 31,
  2016 2015  2016 2015
Standard Commercial Lines        
Loss and Loss Expense Ratio 53.6% 50.3%

54.8%

53.6%
Underwriting Expense Ratio 35.9% 35.6% 36.2% 35.2%
Dividends to Policyholders Ratio 0.0%

0.2%

0.2% 0.4%
Combined Ratio 89.5% 86.1% 91.2% 89.2%
Standard Personal Lines        
Loss and Loss Expense Ratio 76.5% 61.2% 63.3% 69.5%
Underwriting Expense Ratio 32.8% 30.9% 32.3% 30.0%
Dividends to Policyholders Ratio 0.0% 0.0% 0.0% 0.0%
Combined Ratio 109.3% 92.1% 95.6% 99.5%
Excess & Surplus Lines        
Loss and Loss Expense Ratio 73.5% 91.4% 70.5% 74.7%
Underwriting Expense Ratio 33.1% 33.4% 32.9% 35.1%
Dividends to Policyholders Ratio 0.0% 0.0% 0.0% 0.0%
Combined Ratio 106.6% 124.8% 103.4% 109.8%
Total Insurance Operations        
Loss and Loss Expense Ratio 58.4% 55.6% 57.4% 57.7%
Underwriting Expense Ratio 35.2% 34.7% 35.3% 34.5%
Dividends to Policyholders Ratio 0.0% 0.2% 0.2% 0.3%
Combined Ratio 93.6% 90.5% 92.9% 92.5%
Investment Portfolio        
Invested Assets per $ of Stockholders' Equity $3.50 $3.64 $3.50 $3.64
A/T Yield on Investments

2.0%

1.8% 1.9% 1.9%
A/T New Money Rate 2.1% 1.9% 2.1% 1.7%
Other Metrics        
Annualized Return on Average Equity ("ROE") 10.1% 13.2% 10.8% 12.4%
Exclude: Net realized losses (gains) 2.0%

0.8%

0.3% -1.0%
Exclude: Tax on net realized losses (gains) -0.7% -0.3% -0.1% 0.4%
Annualized Operating ROE* 11.4% 13.7% 11.0% 11.8%
Book Value Per Share $26.42 $24.37 $26.42 $24.37
Price to Book 1.6x 1.4x 1.6x 1.4x
Dividend Yield 1.5% 1.8% 1.5% 1.8%
Net Premiums Written to Surplus 1.4x 1.5x 1.4x 1.5x

*Operating income and operating return on equity differ from net income and return on equity, respectively, by the exclusion of after-tax net realized gains and losses on investments and the results of discontinued operations, if any. They are used as important financial measures by management, analysts, and investors, because the realization of net investment gains and losses in any given period is largely discretionary as to timing. In addition, these net realized investment gains and losses, as well as other-than-temporary investment impairments that are charged to earnings and the results of discontinued operations, could distort the analysis of trends. These operating measurements are not intended as a substitute for net income or return on equity prepared in accordance with U.S. generally accepted accounting principles (GAAP). A supplemental investor package, which includes a reconciliation of net income to operating income, is available on the Investors page of our website.