Travelers 2009 Annual Report Download - page 41

Debt Ratings
The following table summarizes the current debt, preferred stock and commercial paper ratings of
the Company and its subsidiaries as of February 18, 2010. The table also presents the position of each
rating in the applicable agency’s rating scale.
A.M. Best Moody’s S&P Fitch
Senior debt................... a (7th of 22) A2 (6th of 21) A (7th of 22) A (6th of 19)
Subordinated debt . . . . . . . . . . . . . . bbb+ (8th of 22) A3 (7th of 21) BBB+ (8th of 22) A (7th of 19)
Junior subordinated debt . . . . . . . . . bbb (9th of 22) A3 (7th of 21) BBB (9th of 22) BBB+ (8th of 19)
Trust preferred securities . . . . . . . . . bbb (9th of 22) A3 (7th of 21) BBB (9th of 22) BBB+ (8th of 19)
Preferred stock . . . . . . . . . . . . . . . . bbb (9th of 22) Baa1 (8th of 21) BBB (9th of 22) —
Commercial paper . . . . . . . . . . . . . . AMB-1 (2nd of 6) P-1 (1st of 3) A-2 (3rd of 10) F-1 (2nd of 7)
Rating Agency Actions
The following rating agency actions were taken with respect to the Company in 2009 and through
February 18, 2010:
• On February 13, 2009, Fitch affirmed all ratings for the Company. The outlook remained stable.
• On May 15, 2009, A.M. Best affirmed the financial strength ratings of the Travelers Reinsurance
Pool, Travelers C&S Co. of America and Travelers C&S Co. of Europe, Ltd. The outlook for the
financial strength ratings is stable. Additionally, for The Travelers Companies, Inc., A.M. Best
revised the outlook for the debt ratings to positive from stable and affirmed the debt ratings.
A.M. Best also upgraded the financial strength ratings of Travelers Guarantee Company of
Canada from ‘‘A’’ to ‘‘A+.’’ The outlook for that rating is stable. In addition, A.M. Best affirmed
the financial strength ratings of The Premier Insurance Company of Massachusetts, First Trenton
Indemnity Company and First Floridian Auto and Home Ins. Co. The outlook for these ratings
is stable.
• On August 11, 2009, Standard & Poor’s revised its outlook to positive from stable for The
Travelers Companies, Inc. and its operating insurance companies and affirmed the claims-paying
and debt ratings of the Company with a one year time horizon for consideration of an upgrade.
• On October 28, 2009, A.M. Best affirmed the financial strength rating of ‘‘A’’ and the issuer
credit rating of ‘‘A+’’ for Travelers Insurance Company Limited. The outlook for both ratings is
stable.
• On November 12, 2009, Standard & Poor’s affirmed the insurer financial strength rating of
‘‘3’’ for Travelers Syndicate Management Limited—Syndicate 5000. The outlook is stable.
• On December 29, 2009, Fitch revised its guidelines for rating preferred stock and hybrid
securities issued by companies in all industry sectors, including insurers. On January 29, 2010,
upon implementing its revised guidelines, Fitch took action to downgrade the ratings of over 200
such securities in the insurance sector, including the Company’s junior subordinated debt and
trust preferred securities. The ratings of the Company’s securities were downgraded to ‘‘BBB+’’
from ‘‘A.’’
Recently, Moody’s also issued revised guidelines for rating insurance hybrid securities and
subordinated debt. Application of these guidelines by Moody’s, which is expected to occur in 2010,
could result in reduced equity credit and/or ratings downgrades of the Company’s hybrid securities and
subordinated debt.
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