State Auto Financial Corp. says it will strengthen reserves by approximately $15 million for 2013's fourth quarter, as it continues to deal with program business, now in runoff, written through Risk Evaluation & Design LLC (RED).

The increase, State Auto says, relates primarily to a large restaurant program and a commercial-auto trucking program.

In October 2012, State Auto announced it had to increase reserves in the third quarter that year for prior periods by between $19 million and $21 million due to business written its RED subsidiary. At the time, Bob Restrepo, State Auto president and CEO said, "We began writing business with this unit in 2010 and acted as quickly as possible to address deteriorating results. In the past three months, claim development exceeded expectations requiring us to put aside reserves to address prior accident years and increase our loss estimates for 2012."

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