Travelers 2007 Annual Report Download - page 40

Each agency’s rating should be evaluated independently of any other agency’s rating. The system and
the number of rating categories can vary widely from rating agency to rating agency. Customers usually
focus on claims-paying ratings, while creditors focus on debt ratings. Investors use both to evaluate a
company’s overall financial strength. The ratings issued on the Company or its subsidiaries by any of
these agencies are announced publicly and are available on the Company’s website and from the
agencies.
The Company’s insurance operations could be negatively impacted by a downgrade in one or more
of the Company’s financial strength ratings. If this were to occur, the Company could experience a
reduced demand for certain products in certain markets. Additionally, the Company’s ability to access
the capital markets could be impacted by a downgrade in one or more of the Company’s debt ratings.
If this were to occur, the Company could incur higher borrowing costs.
Claims—Paying Ratings
The following table summarizes the current claims-paying (or financial strength) ratings of the
Travelers Reinsurance Pool, Travelers C&S Co. of America, Travelers Personal single state companies,
Travelers C&S Co. of Europe, Ltd., Travelers Guarantee Company of Canada and St. Paul Travelers
Insurance Company Limited as of February 21, 2008. The table also presents S&P’s Lloyd’s Syndicate
Assessment rating for St. Paul Travelers Syndicate Management—Syndicate 5000. The table presents
the position of each rating in the applicable agency’s rating scale.
A.M. Best Moody’s S&P Fitch
Travelers Reinsurance Pool (a)(b) ........ A+ (2nd of 16) Aa3 (4th of 21) AA (4th of 21) AA (3rd of 24)
Travelers C&S Co. of America .......... A+ (2nd of 16) Aa3 (4th of 21) AA (4th of 21) AA (3rd of 24)
First Floridian Auto and Home Ins. Co. . . . A (4th of 16) — — AA (3rd of 24)
First Trenton Indemnity Company ........ A (3rd of 16) — — AA (3rd of 24)
The Premier Insurance Co. of MA ....... A (3rd of 16) — — —
Travelers C&S Co. of Europe, Ltd. ....... A+ (2nd of 16) Aa3 (4th of 21) AA (4th of 21) —
Travelers Guarantee Company of Canada . . . A (3rd of 16) — — —
Travelers Insurance Company Limited ..... A (3rd of 16) — — —
Travelers Syndicate Management Limited—
Syndicate 5000 ................... — — 3 (9 of 15) —
(a) The Travelers Reinsurance Pool consists of: The Travelers Indemnity Company, The Charter Oak Fire
Insurance Company, The Phoenix Insurance Company, The Travelers Indemnity Company of Connecticut,
The Travelers Indemnity Company of America, Travelers Property Casualty Company of America, Travelers
Commercial Casualty Company, TravCo Insurance Company, The Travelers Home and Marine Insurance
Company, Travelers Casualty and Surety Company, Northland Insurance Company, Northfield Insurance
Company, Northland Casualty Company, American Equity Specialty Insurance Company, The Standard Fire
Insurance Company, The Automobile Insurance Company of Hartford, Connecticut, Travelers Casualty
Insurance Company of America, Farmington Casualty Company, Travelers Commercial Insurance Company,
Travelers Casualty Company of Connecticut, Travelers Property Casualty Insurance Company, Travelers
Personal Security Insurance Company, Travelers Personal Insurance Company, Travelers Excess and Surplus
Lines Company, St. Paul Fire and Marine Insurance Company, St. Paul Surplus Lines Insurance Company,
Athena Assurance Company, St. Paul Protective Insurance Company, St. Paul Medical Liability Insurance
Company, St. Paul Guardian Insurance Company, St. Paul Mercury Insurance Company, Fidelity and
Guaranty Insurance Underwriters, Inc., Discover Property & Casualty Insurance Company, Discover Specialty
Insurance Company, and United States Fidelity and Guaranty Company.
(b) The following affiliated companies are 100% reinsured by one of the pool participants noted in (a) above:
Atlantic Insurance Company, Fidelity and Guaranty Insurance Company, Gulf Underwriters Insurance
Company, American Equity Insurance Company, Select Insurance Company, St. Paul Fire and Casualty
Insurance Company, The Travelers Lloyds Insurance Company and Travelers Lloyds of Texas Insurance
Company. In addition, Seaboard Surety Company, an affiliated company, is 90% reinsured by The Travelers
Indemnity Company, one of the pool participants noted in (a) above.
28