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                                 Exhibit 10(W)

                          Reinsurance Pooling Agreement
                              Amended and Restated
                              As of January 1, 2000

                                  By and among

                    State Automobile Mutual Insurance Company
               State Auto Property and Casualty Insurance Company
                            Milbank Insurance Company
                       Midwest Security Insurance Company
                       Farmers Casualty Insurance Company
                          State Auto Insurance Company

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                                                                          Page 1

                          REINSURANCE POOLING AGREEMENT
                          -----------------------------
                              AMENDED AND RESTATED
                              --------------------
                              AS OF JANUARY 1, 2000
                              ---------------------


         This Reinsurance Pooling Agreement Amended and Restated effective as of
12:01 a.m., Eastern Standard Time, January 1, 2000 (the "2000 Pooling
Agreement") is by and among State Automobile Mutual Insurance Company, 518 East
Broad Street, Columbus, Ohio (hereinafter referred to as "State Auto Mutual"),
State Auto Property and Casualty Insurance Company, 112 South Main Street,
Greer, South Carolina (hereinafter referred to as "State Auto P&C"), Milbank
Insurance Company, East Highway 12, Milbank, South Dakota (hereinafter referred
to as "Milbank"), Midwest Security Insurance Company, 2700 Midwest Drive,
Onalaska, Wisconsin (hereinafter referred to as "Midwest Security"), Farmers
Casualty Insurance Company, 1300 Woodland Drive, West Des Moines, Iowa
(hereinafter referred to as "Farmers Casualty") and State Auto Insurance
Company, 518 East Broad Street, Columbus, Ohio ("State Auto IC"). (State Auto
Mutual, State Auto P&C, Milbank, Midwest Security, Farmers Casualty and State
Auto IC are herein collectively referred to as the "Pooled Companies" and
individually as a "Pooled Company").

                             BACKGROUND INFORMATION
                             ----------------------

         The Pooled Companies have determined that their business operations
should be conducted by employees of State Auto P&C on behalf of each of the
Pooled Companies and that State Auto Mutual should remain as the agent for each
of the Pooled Companies with respect to collecting and disbursing funds as
required by the Pooled Companies' business operations. These arrangements have
been effected through the Management Agreement dated January 1, 2000 (the "2000
Management Agreement"), as to Midwest Security through the Amended and Restated
Management Agreement dated effective January 1, 2000 (the "2000 Midwest
Management Agreement"), as to Farmers Casualty through the Amended and Restated
Management Agreement dated effective January 1, 2000 (the "2000 Farmers Casualty
Management Agreement") and by means of mutual reinsurance on a percentage basis
as herein provided.

         State Auto Mutual and State Auto P&C originally entered into an
intercompany Reinsurance Agreement effective as of 12:01 a.m., January 1, 1987
(the "Reinsurance Agreement").

         The Reinsurance Agreement has since been amended by an Addendum
effective January 1, 1987, adding insolvency and arbitration provisions; by
Amendment Number 1 effective as of January 1, 1992 amending the pooling
percentages from 20% State Auto P&C - 80% State Auto Mutual to 30% and 70%
respectively; by Amendment Number 2 effective as of January 1, 1991 excluding
post retirement health care benefits liability as a pooled expense and as of
January 1, 1994 excluding post employment benefits liability as a pooled
expense; and by Amendment Number 3 effective as of January 1, 1995 adding
Milbank as a party and adjusting the pooling percentages as follows: State Auto
P&C 35%, State Auto Mutual 55% and Milbank 10% and by an Amended and Restated
Reinsurance Pooling Agreement dated July 1, 1996 (the "7/1/96 Reinsurance
Agreement"), which excluded from the Reinsurance Agreement catastrophic loss
claims and loss adjustment expenses incurred by State Auto Mutual,


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State Auto P&C and Milbank in the amount of $100,000,000 in excess of
$120,000,000 of such losses and loss adjustment expense and the premiums for
such exposure; and by an Amended and Restated Reinsurance Pooling Agreement
effective January 1, 1998 (the "'98 Pooling Agreement") which added Midwest
Security as a party and adjusted the Respective Percentages (as defined below)
to State Auto P&C 37%, State Auto Mutual 52%, Milbank 10%, and Midwest Security
1%; and by a Reinsurance Pooling Agreement Amended and Restated as of January 1,
1999 (hereafter referred to as the "'99 Pooling Agreement") which added Farmers
Casualty as a party and adjusted the Respective Percentages to State Auto
P&C-37%, State Auto Mutual-49%, Milbank-10%, Farmers Casualty-3%, Midwest
Security-1%. In addition to the foregoing amendments to the pooling arrangement
as set forth in the various agreements, each of these agreements and this 2000
Pooling Agreement is subject to the Guaranty Agreement dated as of May 16, 1991
between State Auto Mutual and State Auto P&C (the "Reserve Guaranty Agreement").

         The parties desire to amend and restate the '99 Pooling Agreement as
the 2000 Pooling Agreement, to provide for the continuation of the pooling
arrangement it effects, including the above-described previous amendments and
the additional amendments incorporated herein, which include the following: to
remove from the scope of the 2000 Pooling Agreement the premiums, losses,
underwriting and administrative expenses attributable to State Auto Mutual's
voluntary assumption of reinsurance from third parties which are unaffiliated
with State Auto Mutual, which voluntary assumed reinsurance contracts/treaties
initially commenced on or after January 1, 1999 (this January 1, 1999 and after
voluntary third party assumption reinsurance is hereafter referred to as the
"State Auto Mutual Reinsurance Book"); to add State Auto IC as a new party; to
remove an exclusion for post retirement health care benefits liabilities; and
post employment benefits liabilities and to adjust the Respective Percentages as
set forth below.


                             STATEMENT OF AGREEMENT
                             ----------------------

         In consideration of the mutual covenants set forth herein and INTENDING
TO BE LEGALLY BOUND HEREBY, the parties hereto hereby agree as follows:

         1.       DEFINITIONS: As used in this Agreement:

                  (a) "Net Liabilities" shall mean all direct liabilities plus
                  reinsurance assumed minus reinsurance ceded, except as
                  otherwise expressly excluded below, provided that the parties
                  hereto expressly understand and agree that Net Liabilities
                  excludes any and all liabilities arising out of the State Auto
                  Mutual Reinsurance Book for such reinsurance assumed on and
                  after January 1, 2000.

                  (b) "Net Premiums" shall mean all direct premiums plus
                  reinsurance assumed minus reinsurance ceded, except as
                  otherwise expressly excluded below, provided that the parties
                  hereto expressly understand and agree that Net Premiums
                  excludes any and all premiums arising out of the State Auto


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                  Mutual Reinsurance Book for such reinsurance assumed on and
                  after January 1, 2000.

                  c.       "Respective Percentage" shall be:
                                    As to State Auto IC       1%
                                    As to Farmers Casualty    3%
                                    As to Midwest Security    1%
                                    As to Milbank             10%
                                    As to State Auto P&C      39%
                                    As to State Auto Mutual   46%

         2.       CESSION:

                  (a) STATE AUTO P&C CESSION: State Auto Mutual hereby reinsures
                  and assumes and State Auto P&C hereby cedes and transfers to
                  State Auto Mutual all Net Liabilities incurred under or in
                  connection with all contracts and policies of insurance issued
                  by State Auto P&C outstanding and in force as of and
                  subsequent to 12:01 a.m. Eastern Standard Time, January 1,
                  2000. Such liabilities shall include State Auto P&C's reserves
                  for unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by State
                  Auto P&C's books and records at the close of business on
                  December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of State Auto P&C, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

                  (b) MILBANK CESSION: State Auto Mutual hereby reinsures and
                  assumes and Milbank hereby cedes and transfers to State Auto
                  Mutual all Net Liabilities incurred under or in connection
                  with all contracts and policies of insurance issued by Milbank
                  outstanding and in force as of and subsequent to 12:01 a.m.
                  EST, January 1, 2000. Such liabilities shall include Milbank's
                  reserves for unearned premiums, outstanding losses and loss
                  expenses (including unreported losses) and all other
                  outstanding underwriting and administrative expenses as
                  evidenced by Milbank's books and records at the close of
                  business on December 31, 1999, but shall not include
                  intercompany balances, liabilities incurred in connection with
                  the investment transactions of Milbank, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State

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                  Auto Mutual Reinsurance Book. It is further agreed that State
                  Auto Mutual shall receive the Net Premiums for said contracts
                  and policies.

                  (c) MIDWEST SECURITY CESSION: State Auto Mutual hereby
                  reinsures and assumes and Midwest Security hereby cedes and
                  transfers to State Auto Mutual all Net Liabilities incurred
                  under or in connection with all contracts and policies of
                  insurance issued by Midwest Security outstanding and in force
                  as of and subsequent to 12:01 a.m. EST, January 1, 2000. Such
                  liabilities shall include Midwest Security's reserves for
                  unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by
                  Midwest Security's books and records at the close of business
                  on December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of Midwest Security, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed that State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

                  (d) FARMERS CASUALTY CESSION: State Auto Mutual hereby
                  reinsures and assumes and Farmers Casualty hereby cedes and
                  transfers to State Auto Mutual all Net Liabilities incurred
                  under or in connection with all contracts and policies of
                  insurance issued by Farmers Casualty outstanding and in force
                  as of and subsequent to 12:01 a.m. EST, January 1, 2000. Such
                  liabilities shall include Farmers Casualty's reserves for
                  unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by
                  Farmers Casualty's books and records at the close of business
                  on December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of Farmers Casualty, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed that State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.

                  (e) STATE AUTO IC CESSION: State Auto Mutual hereby reinsures
                  and assumes and State Auto IC hereby cedes and transfers to
                  State Auto Mutual all Net Liabilities incurred under or in
                  connection with all contracts and policies of

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                  insurance issued by State Auto IC outstanding and in force as
                  of and subsequent to 12:01 a.m. EST, January 1, 2000. Such
                  liabilities shall include State Auto IC's reserves for
                  unearned premiums, outstanding losses and loss expenses
                  (including unreported losses) and all other outstanding
                  underwriting and administrative expenses as evidenced by State
                  Auto IC's books and records at the close of business on
                  December 31, 1999, but shall not include intercompany
                  balances, liabilities incurred in connection with the
                  investment transactions of State Auto IC, liabilities for
                  dividends to stockholders declared and unpaid, other
                  liabilities not incurred in connection with underwriting
                  operations and liabilities arising out of the State Auto
                  Mutual Reinsurance Book. It is further agreed that State Auto
                  Mutual shall receive the Net Premiums for said contracts and
                  policies.


         3.       ASSETS TRANSFER TO STATE AUTO MUTUAL:

                  (a) STATE AUTO P&C: In consideration of the agreements herein
                  contained, State Auto P&C hereby agrees that there has been or
                  will be assigned and transferred to State Auto Mutual an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto P&C assumed by State Auto Mutual
                  under paragraph 2(a) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There have been included among the assets assigned and
                  transferred to State Auto Mutual by State Auto P&C all of the
                  right, title and interest of State Auto P&C in and to all
                  assets relative to the underwriting operations of State Auto
                  P&C, due or that became due, as evidenced by its books and
                  records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

                  (b) MILBANK: In consideration of the agreements herein
                  contained, Milbank hereby agrees that there has been or will
                  be assigned and transferred to State Auto Mutual an amount, in
                  cash or other assets, equal to the aggregate of all
                  liabilities of Milbank assumed by State Auto Mutual under
                  paragraph 2(b) hereof, less a ceding commission equal to the
                  sum of the acquisition expenses associated with the unearned
                  premium reserves which are transferred as provided herein.
                  There shall be included among the assets assigned and
                  transferred to State Auto Mutual by Milbank all of the right,
                  title and interest of Milbank in and to all assets relative to
                  the underwriting operations of Milbank due or that

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                  may become due as evidenced by its books and records at the
                  close of business on December 31, 1999 not including
                  investments, accrued investment income, intercompany balances
                  and bank deposits.

                  (c) MIDWEST SECURITY: In consideration of the agreements
                  herein contained, Midwest Security hereby agrees that there
                  has been or will be assigned and transferred to State Auto
                  Mutual an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of Midwest Security assumed by
                  State Auto Mutual under paragraph 2(c) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to State Auto Mutual by
                  Midwest Security all of the right, title and interest of
                  Midwest Security in and to all assets relative to the
                  underwriting operations of Midwest Security due or that may
                  become due as evidenced by its books and records at the close
                  of business on December 31, 1999, not including investments,
                  accrued investment income, intercompany balances and bank
                  deposits.

                  (d) FARMERS CASUALTY: In consideration of the agreements
                  herein contained, Farmers Casualty hereby agrees that there
                  has been or will be assigned and transferred to State Auto
                  Mutual an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of Farmers Casualty assumed by
                  State Auto Mutual under paragraph 2(d) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to State Auto Mutual by
                  Farmers Casualty all of the right, title and interest of
                  Farmers Casualty in and to all assets relative to the
                  underwriting operations of Farmers Casualty due or that may
                  become due as evidenced by its books and records at the close
                  of business on December 31, 1999, not including investments,
                  accrued investment income, intercompany balances and bank
                  deposits.

                  (e) State Auto IC: In consideration of the agreements herein
                  contained, State Auto IC hereby agrees that there has been or
                  will be assigned and transferred to State Auto Mutual an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto IC assumed by State Auto Mutual
                  under paragraph 2(e) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There shall be included

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                  among the assets assigned and transferred to State Auto Mutual
                  by State Auto IC all of the right, title and interest of State
                  Auto IC in and to all assets relative to the underwriting
                  operations of State Auto IC due or that may become due as
                  evidenced by its books and records at the close of business on
                  December 31, 1999, not including investments, accrued
                  investment income, intercompany balances and bank deposits.

         4.       ASSUMPTION OF REINSURANCE:

                  (a) STATE AUTO P&C: State Auto P&C hereby reinsures and
                  assumes and State Auto Mutual hereby cedes and transfers to
                  State Auto P&C its Respective Percentage of all Net
                  Liabilities under all contracts and policies of insurance,
                  (including those ceded by State Auto P&C and reinsured by
                  State Auto Mutual as provided in paragraph 2(a)), on which
                  State Auto Mutual is subject to liability and which are
                  outstanding and in force on or after the effective date
                  hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (b) MILBANK: Milbank hereby reinsures and assumes and State
                  Auto Mutual hereby cedes and transfers to Milbank its
                  Respective Percentage of all Net Liabilities under all
                  contracts and policies of insurance, (including those ceded by
                  Milbank and reinsured by State Auto Mutual as provided in
                  paragraph 2(b)), on which State Auto Mutual is subject to
                  liability and which are outstanding and in force on or after
                  the effective date hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (c) MIDWEST SECURITY: Midwest Security hereby reinsures and
                  assumes and State Auto Mutual hereby cedes and transfers to
                  Midwest Security its Respective Percentage of all

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                                                                          Page 8

                  Net Liabilities under all contracts and policies of insurance,
                  (including those ceded by Midwest Security and reinsured by
                  State Auto Mutual as provided in paragraph 2(c)), on which
                  State Auto Mutual is subject to liability and which are
                  outstanding and in force on or after the effective date
                  hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (d) FARMERS CASUALTY: Farmers Casualty hereby reinsures and
                  assumes and State Auto Mutual hereby cedes and transfers to
                  Farmers Casualty its Respective Percentage of all Net
                  Liabilities under all contracts and policies of insurance,
                  (including those ceded by Farmers Casualty and reinsured by
                  State Auto Mutual as provided in paragraph 2(d)), on which
                  State Auto Mutual is subject to liability and which are
                  outstanding and in force on or after the effective date
                  hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not incurred in connection with underwriting operations and
         liabilities arising out of the State Auto Mutual Reinsurance Book.

                  (e) STATE AUTO IC: State Auto IC hereby reinsures and assumes
                  and State Auto Mutual hereby cedes and transfers to State Auto
                  IC its Respective Percentage of all Net Liabilities under all
                  contracts and policies of insurance, (including those ceded by
                  State Auto IC and reinsured by State Auto Mutual as provided
                  in paragraph 2(e)), on which State Auto Mutual is subject to
                  liability and which are outstanding and in force on or after
                  the effective date hereof.

                  Such liabilities shall include reserves for unearned premiums,
         outstanding losses (including unreported losses) and loss expenses and
         all other underwriting and administrative expenses, but shall not
         include intercompany balances, liabilities for federal income taxes,
         liabilities incurred in connection with investment transactions,
         liabilities for dividends to stockholders declared and unpaid, other
         liabilities not

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         incurred in connection with underwriting operations and liabilities
         arising out of the State Auto Mutual Reinsurance Book.

         5.       ASSET TRANSFER BY STATE AUTO MUTUAL:

                  (a) STATE AUTO P&C: In consideration of the agreements herein
                  contained, State Auto Mutual hereby agrees that there has been
                  or will be assigned and transferred to State Auto P&C an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto Mutual assumed by State Auto P&C
                  under paragraph 4(a) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There shall be included among the assets assigned and
                  transferred to State Auto P&C by State Auto Mutual all of the
                  right, title and interest of State Auto Mutual in and to all
                  assets relative to the underwriting operations of State Auto
                  Mutual, due or that may become due, as evidenced by its books
                  and records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

                  (b) MILBANK: In consideration of the agreements herein
                  contained, State Auto Mutual hereby agrees that there has been
                  or will be assigned and transferred to Milbank an amount, in
                  cash or other assets, equal to the aggregate of all
                  liabilities of State Auto Mutual assumed by Milbank under
                  paragraph 4(b) hereof, less a ceding commission equal to the
                  sum of the acquisition expenses associated with the unearned
                  premium reserves which are transferred as provided herein.
                  There shall be included among the assets assigned and
                  transferred to Milbank by State Auto Mutual all of the right,
                  title and interest of State Auto Mutual in and to all assets
                  relative to the underwriting operations of State Auto Mutual,
                  due or that may become due, as evidenced by its books and
                  records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

                  (c) MIDWEST SECURITY: In consideration of the agreements
                  herein contained, State Auto Mutual hereby agrees that there
                  has been or will be assigned and transferred to Midwest
                  Security an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of State Auto Mutual assumed by
                  Midwest Security under paragraph 4(c) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to Midwest

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                  Security by State Auto Mutual all of the right, title and
                  interest of State Auto Mutual in and to all assets relative to
                  the underwriting operations of State Auto Mutual, due or that
                  may become due, as evidenced by its books and records at the
                  close of business on December 31, 1999, not including
                  investments, accrued investment income, intercompany balances
                  and bank deposits.

                  (d) FARMERS CASUALTY: In consideration of the agreements
                  herein contained, State Auto Mutual hereby agrees that there
                  has been or will be assigned and transferred to Farmers
                  Casualty an amount, in cash or other assets, equal to the
                  aggregate of all liabilities of State Auto Mutual assumed by
                  Farmers Casualty under paragraph 4(d) hereof, less a ceding
                  commission equal to the sum of the acquisition expenses
                  associated with the unearned premium reserves which are
                  transferred as provided herein. There shall be included among
                  the assets assigned and transferred to Farmers Casualty by
                  State Auto Mutual all of the right, title and interest of
                  State Auto Mutual in and to all assets relative to the
                  underwriting operations of State Auto Mutual, due or that may
                  become due, as evidenced by its books and records at the close
                  of business on December 31, 1999, not including investments,
                  accrued investment income, intercompany balances and bank
                  deposits.

                  (e) State Auto IC: In consideration of the agreements herein
                  contained, State Auto Mutual hereby agrees that there has been
                  or will be assigned and transferred to State Auto IC an
                  amount, in cash or other assets, equal to the aggregate of all
                  liabilities of State Auto Mutual assumed by State Auto IC
                  under paragraph 4(e) hereof, less a ceding commission equal to
                  the sum of the acquisition expenses associated with the
                  unearned premium reserves which are transferred as provided
                  herein. There shall be included among the assets assigned and
                  transferred to State Auto IC by State Auto Mutual all of the
                  right, title and interest of State Auto Mutual in and to all
                  assets relative to the underwriting operations of State Auto
                  Mutual, due or that may become due, as evidenced by its books
                  and records at the close of business on December 31, 1999, not
                  including investments, accrued investment income, intercompany
                  balances and bank deposits.

         6.       PREMIUM COLLECTION AND PAYMENT OF LOSSES:

                  As of the effective date of this Agreement and pursuant to the
         terms of the 2000 Management Agreement as amended from time to time,
         the 2000 Midwest Management Agreement, as amended from time to time,
         and the 2000 Farmers Casualty Management Agreement, as amended

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         from time to time, State Auto P&C, Milbank, Midwest Security, Farmers
         Casualty, and State Auto IC hereby authorize and empower State Auto
         Mutual to collect and receive all premiums and to take charge of,
         adjust and administer the payment of all losses with respect to any and
         all contracts and policies of insurance previously or thereafter issued
         by State Auto P&C, Milbank, Midwest Security, Farmers Casualty and
         State Auto IC and to reinsure or terminate all such contracts and
         policies, and in all respects to act as though said contracts and
         policies were issued by State Auto Mutual. State Auto Mutual agrees to
         administer the payment of all losses and loss adjustment expenses in
         connection with such contracts and policies. None of the foregoing is
         intended to affect or impair the direct obligation of State Auto P&C,
         Milbank, Midwest Security, Farmers Casualty and State Auto IC to their
         insureds under policies issued by State Auto P&C, Milbank, Midwest
         Security, Farmers Casualty, and State Auto IC, respectively.

         7.       PREMIUM PAYABLE BY STATE AUTO MUTUAL:

                  (a) STATE AUTO P&C: Commencing with the effective date of this
                  Agreement, State Auto Mutual hereby agrees to pay to State
                  Auto P&C its Respective Percentage of the Net Premiums written
                  by the parties hereto. Similarly, commencing with the
                  effective date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including the policyholder dividends, less all losses and
                  expenses recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for
                  catastrophe reinsurance ceded by State Auto Mutual, Farmers
                  Casualty, Midwest Security, Milbank, and State Auto IC to
                  State Auto P&C pursuant to a Property Catastrophe Overlying
                  Excess of Loss Reinsurance Contract dated as of July 1, 1999
                  as amended January 1, 2000 in which State Auto P&C provides
                  catastrophe coverage for the aforesaid companies for
                  $135,000,000 of catastrophe losses and loss expenses in excess
                  of $120,000,000 of such losses and loss expenses incurred by
                  the Pooled Companies) (the "State Auto P&C Catastrophe
                  Assumption Agreement") shall be prorated among the parties on
                  the basis of the Respective Percentage of each. Accounts shall
                  be rendered at quarterly intervals and shall be settled within
                  sixty (60) days thereafter.

                  (b) MILBANK: Commencing with the effective date of this
                  Agreement, State Auto Mutual hereby agrees to pay Milbank its
                  Respective Percentage of the Net Premiums written by the
                  parties hereto. Similarly, commencing with the effective date

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                  of this Agreement, all losses, loss expenses, underwriting
                  expenses, and administrative expenses chargeable to
                  underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

                  (c) MIDWEST SECURITY: Commencing with the effective date of
                  this Agreement, State Auto Mutual hereby agrees to pay Midwest
                  Security its Respective Percentage of the Net Premiums written
                  by the parties hereto. Similarly, commencing with the
                  effective date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

                  (d) FARMERS CASUALTY: Commencing with the effective date of
                  this Agreement, State Auto Mutual hereby agrees to pay Farmers
                  Casualty its Respective Percentage of the Net Premiums written
                  by the parties hereto. Similarly, commencing with the
                  effective date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.



<PAGE>   14

                                                                         Page 13

                  (e) STATE AUTO IC: Commencing with the effective date of this
                  Agreement, State Auto Mutual hereby agrees to pay State Auto
                  IC its Respective Percentage of the Net Premiums written by
                  the parties hereto. Similarly, commencing with the effective
                  date of this Agreement, all losses, loss expenses,
                  underwriting expenses, and administrative expenses chargeable
                  to underwriting of the parties hereto (except for losses, loss
                  expenses, underwriting expenses and administrative expenses
                  chargeable to the State Auto Mutual Reinsurance Book),
                  including policyholder dividends, less all losses and expenses
                  recovered and recoverable under reinsurance ceded to
                  reinsurers other than the parties hereto, (except for the
                  State Auto P&C Catastrophe Assumption Agreement) shall be
                  prorated among the parties on the basis of the Respective
                  Percentage of each. Accounts shall be rendered at quarterly
                  intervals and shall be settled within sixty (60) days
                  thereafter.

         8. OFFSET: It is understood and agreed that, insofar as is practicable
         and consistent with the purposes and intentions of this Agreement, the
         obligations of each company under this Agreement to transfer assets to
         the other company may, in whole or in part, be offset against the
         reciprocal reinsurance obligations of each company to the other company
         so that each company shall deliver hereunder only a net amount of
         assets required under such offset.

         9. GENERAL STATEMENT OF INTENT: It is the purpose and intent of this
         Agreement that:

                  (a) State Auto Mutual shall be liable as a reinsurer to State
                  Auto P&C, Milbank, Midwest Security, Farmers Casualty, and
                  State Auto IC on the policies and contracts of insurance of
                  State Auto P&C, Milbank, Midwest Security, Farmers Casualty
                  and State Auto IC respectively, issued and in force at 12:01
                  a.m., EST, January 1, 2000, or on which there were, at that
                  time, unsettled claims or losses, and on policies and
                  contracts thereafter issued by State Auto P&C, Milbank,
                  Midwest Security, Farmers Casualty and State Auto IC to the
                  extent of State Auto Mutual's Respective Percentage. Premiums,
                  losses, loss expenses, underwriting expenses and
                  administrative expenses chargeable to the State Auto Mutual
                  Reinsurance Book from and after 12:01 a.m. EST January 1, 2000
                  are excluded from the scope of the 2000 Pooling Agreement.

                  (b) State Auto P&C shall be liable as a reinsurer to State
                  Auto Mutual, Milbank, Midwest Security, Farmers Casualty and
                  State Auto IC on the policies and contracts of insurance of
                  State Auto Mutual, Milbank, Midwest Security, Farmers Casualty
                  and State Auto IC, respectively, issued and in force

<PAGE>   15

                                                                         Page 14

                  at 12:01 a.m., EST, January 1, 2000, or on which there were,
                  at that time, unsettled claims or losses, and on policies and
                  contracts thereafter issued by State Auto Mutual, Milbank,
                  Midwest Security, Farmers Casualty and State Auto IC to the
                  extent of State Auto P&C's Respective Percentage. Premiums,
                  losses, loss expenses, underwriting expenses and
                  administrative expenses chargeable to the State Auto Mutual
                  Reinsurance Book from and after 12:01 a.m. EST January 1, 2000
                  are excluded from the scope of the 2000 Pooling Agreement.

                  (c) Milbank shall be liable as a reinsurer to State Auto
                  Mutual, State Auto P&C, Midwest Security, Farmers Casualty and
                  State Auto IC on the policies and contracts of State Auto
                  Mutual, State Auto P&C, Midwest Security, Farmers Casualty and
                  State Auto IC, respectively, issued and in force at 12:01
                  a.m., EST, on January 1, 2000 or on which there were, at that
                  time, unsettled claims or losses and on policies thereafter
                  issued by State Auto Mutual, State Auto P&C, Midwest Security,
                  Farmers Casualty and State Auto IC to the extent of Milbank's
                  Respective Percentage. Premiums, losses, loss expenses,
                  underwriting expenses and administrative expenses chargeable
                  to the State Auto Mutual Reinsurance Book from and after 12:01
                  a.m. EST January 1, 2000 are excluded from the scope of the
                  2000 Pooling Agreement.

                  (d) Midwest Security shall be liable as a reinsurer to State
                  Auto Mutual, State Auto P&C, Milbank, Farmers Casualty and
                  State Auto IC on the policies and contracts of State Auto
                  Mutual, State Auto P&C, Milbank, Farmers Casualty and State
                  Auto IC, respectively, issued and in force at 12:01 a.m., EST,
                  on January 1, 2000 or on which there were, at that time,
                  unsettled claims or losses and on policies thereafter issued
                  by State Auto Mutual, State Auto P&C, Milbank, Farmers
                  Casualty and State Auto IC to the extent of Midwest Security's
                  Respective Percentage. Premiums, losses, loss expenses,
                  underwriting expenses and administrative expenses chargeable
                  to the State Auto Mutual Reinsurance Book from and after 12:01
                  a.m. EST January 1, 2000 are excluded from the scope of the
                  2000 Pooling Agreement.

                  (e) Farmers Casualty shall be liable as a reinsurer to State
                  Auto Mutual, State Auto P&C, Milbank, Midwest Security and
                  State Auto IC on the policies and contracts of State Auto
                  Mutual, State Auto P&C, Milbank, Midwest Security and State
                  Auto IC, respectively, issued and in force at 12:01 a.m., EST,
                  January 1, 2000 or on which there were, at that time,
                  unsettled claims or losses, and on policies and

<PAGE>   16

                                                                         Page 15

                  contracts thereafter issued by State Auto Mutual, State Auto
                  P&C, Milbank, Midwest Security and State Auto IC to the extent
                  of Farmers Casualty's Respective Percentage. Premiums, losses,
                  loss expenses, underwriting expenses and administrative
                  expenses chargeable to the State Auto Mutual Reinsurance Book
                  from and after 12:01 a.m. EST January 1, 2000 are excluded
                  from the scope of the 2000 Pooling Agreement.

                  (f) State Auto IC shall be liable as a reinsurer to State Auto
                  Mutual, State Auto P&C, Milbank, Midwest Security and Farmers
                  Casualty on the policies and contracts of State Auto Mutual,
                  State Auto P&C, Milbank, Midwest Security and Farmers
                  Casualty, respectively, issued and in force at 12:01 a.m.,
                  EST, January 1, 2000 or on which there were, at that time,
                  unsettled claims or losses, and on policies and contracts
                  thereafter issued by State Auto Mutual, State Auto P&C,
                  Milbank, Midwest Security and Farmers Casualty to the extent
                  of State Auto IC's Respective Percentage. Premiums, losses,
                  loss expenses, underwriting expenses and administrative
                  expenses chargeable to the State Auto Mutual Reinsurance Book
                  from and after 12:01 a.m. EST January 1, 2000 are excluded
                  from the scope of the 2000 Pooling Agreement.

                  (g) The parties hereto shall, on and after 12:01 a.m., EST,
                  January 1, 2000, participate on the basis of 46% for State
                  Auto Mutual, 39% for State Auto P&C, 10% for Milbank, 1% for
                  Midwest Security, 3% for Farmers Casualty, and 1% for State
                  Auto IC in all of the underwriting operations of each of the
                  six parties hereto. Premiums, losses, loss expenses,
                  underwriting expenses and administrative expenses chargeable
                  to the State Auto Mutual Reinsurance Book from and after 12:01
                  a.m. EST January 1, 2000 are excluded from the scope of the
                  2000 Pooling Agreement.

         10. LOSSES EXCLUDED: Notwithstanding any of the foregoing, the parties
         hereto understand and agree that this 2000 Pooling Agreement shall not
         apply to catastrophe losses and loss expenses for residential and
         commercial property to the extent such losses and loss expenses are
         covered by the State Auto P&C Catastrophe Assumption Agreement. Once
         the aforesaid $135,000,000 of coverage is exhausted by loss expenses
         and loss payments on behalf of any party hereto, under either the State
         Auto P&C Catastrophe Assumption Agreement or directly, all parties
         understand and agree that catastrophe losses and loss expenses in
         excess of $255,000,000 shall once again be ceded and assumed under the
         terms of the 2000 Pooling Agreement. All premiums attributable to the
         State Auto P&C Catastrophe Assumption Agreement are to be paid to State
         Auto P&C outside of the 2000 Pooling Agreement. All premiums, losses,
         loss expenses, underwriting expenses and administrative expenses
         attributable

<PAGE>   17

                                                                         Page 16

         to the State Auto Mutual Reinsurance Book from and after 12:01 a.m. EST
         January 1, 2000 are outside the 2000 Pooling Agreement. In addition,
         this 2000 Pooling Agreement is subject to the Reserve Guaranty
         Agreement.

         11. LIABILITIES EXCLUDED: In addition to the liabilities set forth in
         paragraphs 2(a), 2(b), 2(c), 2(d), 2(e) and 10 above, this Agreement
         shall not apply to the investment operation or liabilities for federal
         income tax or other liabilities excluded by this Agreement.

         12. "FOLLOW THE FORTUNES": The reinsurance provided by the terms of
         this Agreement shall be subject to the same terms and conditions under
         which the original insurance was concluded, or which may be or may have
         been agreed to during the term of the original insurance contract.

         13. METHODS AND PROCEDURES: The president of State Auto Mutual, State
         Auto P&C, Milbank, Midwest Security, Farmers Casualty and State Auto
         IC, or any officer of any of these companies designated by said
         president, shall determine the methods and procedures, including
         accounting transactions, by which the terms of this Agreement shall be
         performed by and on behalf of the parties hereto.

         14. AMENDMENTS: This Agreement may be modified from time to time, so as
         to adapt its provisions to the varying conditions of the business of
         the Pooled Companies, by a mutual agreement in writing of the parties
         hereto, subject to ratification by the Board of Directors of each party
         and with the approval of the insurance regulatory officials from the
         State of Ohio, the State of South Carolina, the State of South Dakota,
         the State of Wisconsin, and the State of Iowa as required by law.

         15. TERM: This Agreement shall remain in full force and effect until
         canceled by agreement of the parties or by the giving of ninety (90)
         days notice by one of the parties to the other parties and to the
         respective domiciliary insurance department of each of the parties.

         16. INTERPRETATION: Wherever required to give the correct meaning
         throughout this Agreement, the singular shall be interpreted in the
         plural. Clerical errors or errors of involuntary or inadvertent
         omission or commission shall not be interpreted as a discharge of
         liability on behalf of any of the parties to this contract. Such errors
         shall be rectified at the time of discovery or as soon as practicable
         thereafter. Caption headings are for convenience only and are not
         intended to affect the construction of the terms hereof.

         17. INSOLVENCY: The reinsurance made under this Agreement (which the
         parties understand and agree excludes the State Auto Mutual Reinsurance
         Book for such business assumed on and after January 1, 2000) shall be
         payable by the assuming reinsurer on the basis of the liability of the
         ceding insurer under the contract or contracts reinsured without
         diminution because of the insolvency of the ceding insurer. In the
         event of insolvency

<PAGE>   18

                                                                         Page 17

         of the ceding insurer, the liquidator or receiver or statutory
         successor of such insurer shall give written notice to the assuming
         reinsurer of the pendency of a claim against the insolvent ceding
         insurer on the policy or bond reinsured within a reasonable time after
         such claim is filed in the insolvency proceeding; that during the
         pendency of such claim the assuming reinsurer may investigate such
         claim and interpose, at its own expense, in the proceeding where such
         claim is to be adjudicated any defense or defenses which it may deem
         available to the ceding insurer or its liquidator or receiver or
         statutory successors; that the expense thus incurred by the assuming
         reinsurer shall be chargeable, subject to court approval, against the
         insolvent ceding insurer as part of the expense of liquidation to the
         extent of a proportionate share of the benefit which may accrue to the
         ceding insurer solely as a result of the defense undertaken by the
         assuming reinsurer. The reinsurance made effective under this Agreement
         shall be payable by the assuming reinsurer to the ceding insurer or to
         the liquidator, receiver or statutory successor of the ceding insurer.

         18. ARBITRATION: In the event of any dispute hereafter arising with
         respect to this Agreement, State Auto Mutual, State Auto P&C, Milbank,
         Midwest Security, Farmers Casualty and State Auto IC hereby agree that
         such dispute shall, upon the request of the one of the parties, be
         submitted to arbitration. One arbitrator shall be chosen by each party
         and those arbitrators shall then select an umpire who shall hear and
         decide the issues to be arbitrated. If one party fails to name an
         arbitrator within thirty (30) days after receipt of a written request
         to do so, the party initiating the arbitration may choose the
         arbitrators. The decision of the umpire shall be final and binding on
         the parties. Each party shall bear the expense of its arbitrator and
         the cost of the umpire shall be shared equally. The arbitration shall
         take place at Columbus, Ohio or such other location upon which the
         parties may mutually agree.

         19. COUNTERPARTS: The 2000 Pooling Agreement may be executed in two or
         more counterparts, each of which shall be deemed an original and all of
         which shall constitute one and the same instrument.


<PAGE>   19

                                                                         Page 18

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
         executed as of the date and the year first above written.


Attest                                             State Automobile Mutual
                                                   Insurance Company



/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                        President


                                                   State Auto Property and
                                                   Casualty Insurance Company


/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                      President


                                                 Milbank Insurance Company


/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                      President


                                                 Midwest Security
                                                 Insurance Company


/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                      President


                                                 Farmers Casualty
                                                 Insurance Company


/s/ John R. Lowther                   By /s/ Marion D. Houk
--------------------------               ---------------------------------
Assistant Secretary                            President

                                                 State Auto Insurance Company

/s/ John R. Lowther                   By /s/ Robert H. Moone
--------------------------               ---------------------------------
Secretary                                        President