FIRST AMENDMENT to AMENDED AND RESTATED MANAGEMENT AND OPERATIONS AGREEMENT among STATE AUTO PROPERTY & CASUALTY INSURANCE COMPANY STATE AUTOMOBILE MUTUAL INSURANCE COMPANY and THE ROCKHILL COMPANIES

EXHIBIT 10.39

FIRST AMENDMENT

to

AMENDED AND RESTATED MANAGEMENT AND OPERATIONS AGREEMENT

among

STATE AUTO PROPERTY & CASUALTY INSURANCE COMPANY

STATE AUTOMOBILE MUTUAL INSURANCE COMPANY

and THE ROCKHILL COMPANIES

This First Amendment (“First Amendment”) to the Amended and Restated Management and Operations Agreement among State Auto Property & Casualty Insurance Company (“State Auto P&C”), State Automobile Mutual Insurance Company (“Mutual”) and the Rockhill Companies (the “Rockhill Management Agreement”) is made by and among State Auto P&C, Mutual, Rockhill Insurance Company, Plaza Insurance Company, American Compensation Insurance Company, Bloomington Compensation Insurance Company, Rockhill Holding Company, National Environmental Coverage Corporation of the South, LLC, National Environmental Coverage Corporation, RTW, Inc., Rockhill Insurance Services, LLC, and Rockhill Underwriting Management, LLC. This First Amendment shall be effective and operative as set forth in Section 5 of this First Amendment.

Background Information

With this First Amendment, the parties intend to allow the Rockhill Companies to pay claims and expenses on behalf of the parties to the Rockhill Management Agreement, which payments will be allocated to and timely reimbursed by the party that issued the policy under which the payment was made.

In response to a recommendation from the Independent Committee of the Board of Directors of each of Mutual and State Auto Financial Corporation, the Boards of Directors of all the parties hereto have approved this First Amendment.

Statement of Agreement

In consideration of the mutual covenants set forth herein and INTENDING TO BE LEGALLY BOUND HEREBY, the parties to this First Amendment agree to amend the Rockhill Management Agreement as follows:

“Claims and other expenses incurred by Rockhill Companies while performing these services shall be allocated to the appropriate member of the group and the Rockhill Companies shall be reimbursed for such claims and other expenses in accordance with paragraph 8 herein.”

“Expenses shall be apportioned in accordance with SSAP No, 70, Allocation of Expenses, The books, accounts, and records shall be so maintained as to clearly and accurately disclose the nature and details of the transactions including such accounting information as is necessary to support the expenses apportioned to the respective parties.”

“Expenses incurred by the Rockhill Companies for certain unique services shall be borne solely by the State Auto Company to whose operations the expenses are related.”