Document:

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                                                                   Exhibit 10.54

                         STATE AUTO INSURANCE COMPANIES
                         QUALITY PERFORMANCE BONUS PLAN
                                  2004 ADDENDUM

                             EFFECTIVE APRIL 1, 2004

2004 PERFORMANCE STANDARDS ADDENDUM:

This 2004 Performance Standards Addendum (the "2004 Addendum") effective as of
the date set forth above, is attached to and hereby expressly made a part of the
State Auto Insurance Companies Quality Performance Bonus Plan (the "Plan").
Capitalized terms not otherwise defined herein shall have the meaning given them
in the Plan. Each calendar quarter in which the conditions described below for
payment of QPB are met is referred to hereafter as a Performance Quarter. If the
terms of the Plan are inconsistent with the terms of the 2004 Addendum, the
terms of the Plan shall prevail. This 2004 Addendum shall be applicable until it
is replaced by a subsequently dated addendum or until the Plan is terminated,
whichever first occurs.

As a condition precedent to any QPB award, the Companies' combined loss and
expense ratio in each respective calendar quarter as calculated on a gross basis
(i.e., before any reinsurance applicable) must be lower than 100%, based on
statutory accounting practices (the "CR Condition").

Provided the CR Condition is met for the Performance Quarter, a QPB based on
underwriting profit shall be earned by all Eligible Employees, if the Companies'
gross loss ratio (i.e., before any reinsurance applicable) is less than the
percentage achieved by subtracting from 100% State Auto's direct expense ratio
for the four consecutive calendar quarter period ending as of the last day of
the calendar quarter immediately preceding the commencement of the then current
Performance Quarter (the "Loss Ratio Target"). The total QPB Pool (as defined
below)

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will be reduced in the aggregate by 10% for any Performance Quarter in which
State Auto does not meet the then current year's corporate sales goal
established for it by State Auto's Chief Executive Officer.

2004 QPB PAYMENT FORMULA:

The QPB Pool equals twenty percent (20%) of the underwriting profit derived from
the Companies having achieved a gross loss ratio less than the Loss Ratio Target
in a particular Performance Quarter. Stated as a formula, the QPB Pool = Loss
Ratio Target - Companies' gross loss ratio for the Performance Quarter x
Companies' earned premium for the Performance Quarter x 20%.

The formula varies depending on whether the Eligible Employee is a
branch/regional office employee (a "branch/regional office employee") or a
corporate employee (a "corporate employee"), each as determined by management of
the Companies. For corporate employees, subject to the adjustment described
below, the QPB payment equals 20% of the underwriting profit derived from the
Companies' having achieved a gross loss ratio less than the Loss Ratio Target.
Stated in a formula, the QPB percentage payout for a corporate employee is:

                           .20 x (Loss Ratio Target -
           Companies' gross loss ratio for the Performance Quarter) x

              Companies' earned premium in the Performance Quarter
              ----------------------------------------------------
     Quarterly Base Compensation of all Eligible Employees of the Companies

Subject to the adjustment described below, the resulting QPB percentage payout
is applied to each corporate employee's Base Compensation paid in the respective
Performance Quarter.

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For branch/regional office employees, the amount of the QPB payment depends on
(i) the amount by which the Companies' gross loss ratio is less than the Loss
Ratio Target and (ii) the amount by which the gross loss ratio on business
produced by the branch/regional office is less than the Loss Ratio Target.
Thirty percent (30%) of the branch/regional office employee's QPB payment is
based on the Companies' gross loss ratio and seventy percent (70%) is based on
each respective branch/regional office's gross loss ratio. Stated as a formula,
the QPB percentage payout for the branch/regional office employee equals:

                           .20 x (Loss Ratio Target -
           Companies' gross loss ratio for the Performance Quarter) x

          Companies' earned premium for the Performance Quarter x .30
          -----------------------------------------------------------
     Quarterly Base Compensation of all Eligible Employees of the Companies

                                      PLUS

                           .20 x (Loss Ratio Target -
     branch/regional office gross loss ratio for the Performance Quarter) x

           Companies' earned premium for the Performance Quarter x .70
           -----------------------------------------------------------
     Quarterly Base Compensation of all Eligible Employees of the Companies

(note: the Loss Ratio Target for State Auto National is the Companies' Loss
Ratio Target plus five (5) percentage points)

The results of these two calculations are added together to determine the QPB
payout percentage for each respective branch/regional office employee. Subject
to the adjustment described below, the resulting percentage is applied to each
branch/regional office employee's Base Compensation paid in the Performance
Quarter.

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In the event the dollars that would be paid out as a result of these
calculations exceed the amount of the QPB Pool, the payout percentages are
reduced pro rata so the total QPB payout does not exceed the amount of the QPB
Pool for a Performance Quarter.

The minimum amount of the QPB payment is 1% of each Eligible Employee's
quarterly Base Compensation, provided the condition precedent set forth above is
met.

If the Companies' corporate sales goal for the particular calendar year, as
established by the CEO and published internally, is not met in any particular
Performance Quarter, the total amount of the QPB Pool shall be reduced by 10%.<PAGE>
                                                                   Exhibit 10.55

                             FIFTH AMENDMENT TO THE
                          REINSURANCE POOLING AGREEMENT
                   AMENDED AND RESTATED AS OF JANUARY 1, 2000

This Fifth Amendment (the "Fifth Amendment") to the Reinsurance Pooling
Agreement Amended and Restated as of January 1, 2000, as heretofore amended (the
"2000 Pooling Agreement"), by and among State Automobile Mutual Insurance
Company ("State Auto Mutual"), State Auto Property and Casualty Insurance
Company ("State Auto P&C"), Milbank Insurance Company ("Milbank"), State Auto
Insurance Company of Wisconsin ("State Auto Wisconsin"), Farmers Casualty
Insurance Company ("Farmers Casualty"), State Auto Insurance Company of Ohio
("State Auto Ohio") and State Auto Florida Insurance Company ("State Auto
Florida") (collectively, the "Pooled Companies") is made this 8th day of
July 2004, but is effective as of 12:01 a.m. Columbus, Ohio time July 1, 2004.

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

The State Auto Group of insurance companies ("State Auto") intends to expand the
scope of its commercial insurance operations by offering customers State Auto
Middle Market Insurance (as defined below).

State Auto believes that State Auto Middle Market Insurance is an important
opportunity to increase its penetration in commercial lines and to form closer
ties with its independent insurance agents who distribute State Auto's other
products.

State Auto desires for agents to place State Auto Middle Market Insurance with
Meridian Security Insurance Company ("Meridian Security"), an Indiana domiciled
property casualty insurer which is a wholly owned subsidiary of State Auto
Mutual.

On an interim basis, such coverage shall be placed in State Auto Mutual because
it currently holds the requisite state licenses and rate/form filings, while
Meridian Security is in the process of securing these regulatory approvals.
Placing business with State Auto Mutual will allow earlier entry into this
important market segment.

For the interim period that State Auto Middle Market Insurance is to be written
through State Auto Mutual, said insurance would be subject to the 2000 Pooling
Agreement unless specifically excluded therefrom. State Auto does not intend for
State Auto Middle Market Insurance to be subject to the 2000 Pooling Agreement;
therefore, the 2000 Pooling Agreement needs to be amended to exclude State Auto
Middle Market Insurance.

The Independent Committee of the Board of Directors of each of State Auto Mutual
and State Auto Financial Corporation has approved the exclusion of State Auto
Middle Market Insurance from the 2000 Pooling Agreement.

The purpose of the Fifth Amendment is to exclude State Auto Middle Market
Insurance from the 2000 Pooling Agreement from and after the effective date
hereof.

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

In consideration of the mutual covenants set forth herein and INTENDING TO BE
LEGALLY BOUND HEREBY, the Pooled Companies agree to amend the 2000 Pooling
Agreement as follows:

          1. Capitalized terms used in this Fifth Amendment (including the
     Background Information) which are not otherwise defined herein shall be
     defined as in the 2000 Pooling Agreement and those definitions shall apply
     in this Fifth Amendment.

          2. It is understood and agreed that State Auto Middle Market Insurance
     is defined as follows: State Auto Middle Market Insurance is (i) property
     casualty insurance for commercial risks that are larger than those included
     in the standard segment of State Auto's business; (ii) underwritten by the
     State Auto Middle Market Insurance underwriting unit; and (iii) coded by
     State Auto as State Auto Middle Market Insurance.

          3. Section 1 a. of the 2000 Pooling Agreement is hereby amended by the
     addition of the following sentence: It is understood and agreed that Net
     Liabilities excludes any and all liabilities arising out of State Auto
     Middle Market Insurance for such insurance written on and after 12:01 a.m.,
     July 1, 2004.

          4. Section 1 b. of the 2000 Pooling Agreement is hereby amended by the
     addition of the following sentence: It is understood and agreed that Net
     Premiums excludes any and all premiums arising out of State Auto Middle
     Market Insurance for such insurance written on and after 12:01 a.m., July
     1, 2004.

          5. The following sentence is added to section 2. Cession of the 2000
     Pooling Agreement: Notwithstanding anything to the contrary in subsections
     (a), (b), (c), (d), (e), and (f) of this section 2, liabilities incurred in
     connection with or arising out of State Auto Middle Market Insurance are
     not included in the liabilities ceded in the above described subsections of
     this section 2.

          6. The following sentence is added to section 4. Assumption of
     Reinsurance of the 2000 Pooling Agreement: Notwithstanding anything to the
     contrary in subsections (a), (b), (c), (d), (e), and (f) of this section 4,
     liabilities incurred in connection with or arising out of State Auto Middle
     Market Insurance are not included in the liabilities reinsured and assumed
     in the above described subsections of this section 4.

          7. The following sentence is added to section 7. Premium Payable by
     State Auto Mutual of the 2000 Pooling Agreement:

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     Notwithstanding anything to the contrary in subsections (a), (b), (c),
     (d), (e), and (f) of this section 7, no losses, loss expenses, underwriting
     expenses and administrative expenses chargeable to State Auto Middle Market
     Insurance shall be included in the amounts pro rated among the parties on
     the basis of the Respective Percentage of each as described in the above
     referenced subsections of this section 7.

          8. The following sentence is added to section 9. General Statement of
     Intent of the 2000 Pooling Agreement: Notwithstanding anything to the
     contrary in subsections (a), (b), (c), (d), (e), (f), (g), and (h) of this
     section 9, premiums, losses, loss expenses, underwriting expenses and
     administrative expenses chargeable to State Auto Middle Market Insurance
     from and after 12:01 a.m., July 1, 2004, are excluded from the scope of the
     2000 Pooling Agreement.

          9. The following sentence is added to section 10. Losses Excluded of
     the 2000 Pooling Agreement: All premiums, losses, loss expenses,
     underwriting expenses and administrative expenses chargeable to State Auto
     Middle Market Insurance from and after 12:01 a.m., July 1, 2004, are
     excluded from the scope of the 2000 Pooling Agreement.

          10. The following sentence is added to section 17. Insolvency: The
     parties to this Agreement understand and agree that the reinsurance made
     under this agreement excludes State Auto Middle Market Insurance for such
     business written on and after 12:01 a.m., July 1, 2004.

          11. The Fifth Amendment is effective as of 12:01 a.m. Columbus, Ohio
     time July 1, 2004 (the "Effective Date"), provided that it is not
     disapproved by any insurance regulator with jurisdiction over any party to
     the 2000 Pooling Agreement, as amended heretofore and hereby. If the Fifth
     Amendment is disapproved as indicated, the Fifth Amendment shall be deemed
     null and void and shall not be deemed to have amended the 2000 Pooling
     Agreement in any manner whatsoever. This Fifth Amendment shall terminate
     when the 2000 Pooling Agreement terminates, absent the earlier termination
     hereof by the written consent of all parties hereto.

Except as expressly amended hereby, the 2000 Pooling Agreement shall continue in
full force and effect for the balance of the term thereof.

By the signature of an authorized officer hereon, each of the parties hereto
agrees to the terms of this Fifth Amendment.

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State Automobile Mutual Insurance Company

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

State Auto Property and Casualty Insurance Company

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

Milbank Insurance Company

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

State Auto Insurance Company of Wisconsin

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

Farmers Casualty Insurance Company

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

State Auto Insurance Company of Ohio

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

State Auto Florida Insurance Company

By: /s/ Robert H. Moone
    ------------------------------------------------
         Robert H. Moone, President

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