Travelers 2004 Annual Report Download - page 36

In connection with the April 1, 2004 consummation of the merger of TPC and SPC, A.M. Best, Moody’s,
S&P and Fitch announced the following rating actions with respect to the Company.
• A.M. Best: On April 2, 2004, A.M. Best downgraded the financial strength rating of the Travelers
Property Casualty Pool from A++ to A+. The rating has since been removed from under review and
assigned a stable outlook. A.M. Best also downgraded the debt ratings to a from aa- on senior and to a-
from a+ on subordinated notes issued by TPC and TIGHI. These ratings have been removed from under
review and assigned stable outlooks. A.M. Best also removed from under review and affirmed the St.
Paul Insurance Group financial strength rating of A with a positive outlook, and removed from under
review and upgraded The St. Paul Travelers Companies, Inc. senior debt rating to a from bbb+ with a
stable outlook.
• Moody’s: On March 31, 2004, Moody’s announced that it had lowered the debt ratings of TPC and
TIGHI by one notch (senior debt to A3 from A2 and junior subordinated debt to Baa1 from A3).
Following its rating action, Moody’s noted that the outlook for the debt and financial strength ratings of
TPC and its rated affiliates is stable. Moody’s rated the members of the Travelers Property Casualty
Pool Aa3 for insurance financial strength with a stable outlook. Moody’s affirmed the St. Paul Insurance
Group financial strength rating of A1 with a positive outlook and affirmed The St. Paul Travelers
Companies, Inc. senior debt rating of A3 with a stable outlook.
• S&P: On April 1, 2004, S&P lowered its counterparty credit and financial strength ratings on the
members of the Travelers Property Casualty Pool, Travelers Casualty and Surety Co. of America, and
Travelers Casualty and Surety Co. of Europe Ltd. (Travelers Europe) to A+ from AA- and removed
them from CreditWatch. S&P also lowered its counterparty credit rating of TPC to BBB+ from A- and
removed it from CreditWatch. The A+ counterparty credit and financial strength ratings on Gulf and its
intercompany insurance pool members remain on CreditWatch with negative implications pending
receipt of explicit support from Travelers. S&P expects that The Travelers Indemnity Company will
guarantee all past and future liabilities associated with Gulf’s book of business. S&P noted that the
outlook on all TPC operating units (except for Gulf) is stable. S&P removed from CreditWatch and
affirmed the financial strength rating of A+ of the St. Paul Insurance Group, and removed The St. Paul
Travelers Companies, Inc. from CreditWatch and affirmed The St. Paul Travelers Companies, Inc.
senior debt rating of BBB+, both with a stable outlook.
• Fitch: On April 1, 2004, Fitch announced the insurer financial strength ratings of TPC’s primary
underwriting pool were removed from Rating Watch Negative and affirmed at AA. The Rating Outlook
is Stable. Both TPC and TIGHI’s long-term issuer ratings and senior debt have been removed from
Rating Watch Negative and downgraded to A- from A. For all debt ratings, the Rating Outlook is Stable.
Fitch also removed The St. Paul Travelers Companies, Inc. from Rating Watch Positive and upgraded
the senior debt rating to A- from BBB with a stable outlook.
On June 29, 2004, A.M. Best announced the following ratings changes:
• A.M. Best upgraded the financial strength rating of Travelers Casualty and Surety of Europe to A+ from
A with a stable outlook.
• A.M. Best downgraded the financial strength rating of Gulf Insurance Group to A- from A with a stable
outlook.
On July 23, 2004, A.M. Best, Moody’s, S&P and Fitch announced the following rating actions with respect
to the Company.
• A.M. Best affirmed the financial strength rating of Travelers Property Casualty Pool (A+), St. Paul
Insurance Group (A) and Discover Reinsurance Company (A-). A.M. Best downgraded the debt rating
to a- from a on senior, bbb+ from a- on subordinated, bbb from bbb+ on trust preferred securities and
bbb from bbb+ on preferred stock for The St. Paul Travelers Companies, Inc. A.M. Best also
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