Travelers 2010 Annual Report Download - page 40

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:
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.
Debt Ratings
The following table summarizes the current debt, preferred stock and commercial paper ratings of
the Company and its subsidiaries as of February 17, 2011. 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 (6
th of 22) A2 (6th of 21) A (7th of 22) A (6th of 22)
Subordinated debt .............. a (7th of 22) A3 (7th of 21) BBB+ (8th of 22) BBB+ (8th of 22)
Junior subordinated debt ......... bbb+ (8th of 22) A3 (7th of 21) BBB (9th of 22) BBB+ (8th of 22)
Trust preferred securities ......... bbb+ (8th of 22) A3 (7th of 21) BBB (9th of 22) BBB+ (8th of 22)
Preferred stock ................ bbb+ (8th of 22) Baa1 (8th of 21) BBB (9th of 22) —
Commercial paper .............. AMB-1 (2
nd of 6) P-1 (1st of 4) A-2 (3rd of 10) F-1 (2nd of 8)
Rating Agency Actions
The following rating agency actions were taken with respect to the Company from February 18,
2010 (the date on which the Company filed its Form 10-K for the year ended December 31, 2009),
through February 17, 2011:
• On June 8, 2010, A.M. Best upgraded the Company’s debt ratings for The Travelers
Companies, Inc. one notch and reaffirmed the claims-paying ratings for Travelers Reinsurance
Pool, Travelers C&S Co. of America, First Floridian Auto and Home Ins. Co., First Trenton
Indemnity Company, The Premier Insurance Company of Massachusetts, Travelers C&S Co. of
Europe, Ltd. and Travelers Guarantee Company of Canada. The outlook for all ratings is stable.
• On June 10, 2010, Fitch affirmed all ratings for the Company. The outlook remained stable.
• On August 10, 2010, Standard & Poor’s affirmed all ratings for the Company. The outlook
remained positive.
• On October 15, 2010, Moody’s affirmed all ratings for the Company. The outlook remained
stable.
• On October 15, 2010, A.M. Best affirmed all ratings of Travelers Insurance Company Limited.
The outlook remained stable.
• On October 27, 2010, Fitch affirmed all ratings for the Company. The outlook remained stable.
• On February 1, 2011, Fitch affirmed all ratings for the Company. The outlook remained stable.
INVESTMENT OPERATIONS
The majority of funds available for investment are deployed in a widely diversified portfolio of
high quality, liquid taxable U.S. Government, tax-exempt U.S. municipal, and taxable corporate and
U.S. agency mortgage-backed bonds. The Company closely monitors the duration of its fixed maturity
investments, and investment purchases and sales are executed with the objective of having adequate
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