State Auto Financial Declares 11% Increase in Dividend

COLUMBUS, Ohio--Aug. 18, 2006--Today the board of directors of State Auto Financial Corporation announced an increase in the company's regular quarterly cash dividend from $0.09 to $0.10 per share. The dividend is payable September 29, 2006, to shareholders of record at the close of business on September 15, 2006.

This is the 61st consecutive quarterly cash dividend declared by the company's board since STFC had its initial public offering of common stock in 1991, and represents an 11% increase in the annual dividend rate. STFC's dividend payments have been increased annually at a compound average annual growth rate of 15% since 1991.

State Auto Financial Corporation, headquartered in Columbus, Ohio, is a property and casualty insurance holding company. The company markets its personal and commercial insurance products through more than 22,500 independent insurance agents associated with approximately 3,000 agencies in 27 states. The company has been named Forbes Magazine's "Best Managed Insurance Company in America" for 2006 and is in a select group, making up just 3% of publicly traded companies, earning the 2006 Mergent Dividend Achiever Award for having increased its dividends for ten or more years in succession. The State Auto Insurance Companies are rated A+ (Superior) by the A.M. Best Company. Additional information on the company can be found on its web page at www.STFC.com.