Travelers Property Casualty Corp
Travelers Property Casualty — Merger or Acquisition (December 2003)
37 slides from Travelers Property Casualty's merger presentation, Dec 18, 2003
Slide 1: The St. Paul Travelers Companies
St. Paul The St. Paul Travelers Companies Cemmereial Intemational ie Ms Pe Commercia Automate Felty & pd Surety cA Property a Other 21% General Liailty ‘Workers 18% Carpensaticn 10% 2002 NPW: $6,299 MM Travelers Homeowners Fidelity & oer SY eae 15% Persoral Adem f 238% eres’ Compensation 10% Commerc
Slide 2: Principal Terms of the Transaction
Source: A.M. Best. Based on 2002 direct premiums written. The following A.M. Best lines of business are included in the definition of “Commercial Lines” as shown in the charts: Fire, Allied Lines, Ocean Marine, Inland Marine, Earthquake, Workers’ Compensation, Other Liability, Products Liability, Bu
Slide 3: Setting the Property/Casualty Market Standard
The St. Paul Travelers Companies Setting the Property/Casualty Market Standard
Slide 4: Cautionary Statement
Cautionary Statement Any comments made regarding future expectations, trends and market conditions, including pricing and loss cost trends as well as other topics, may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve r
Slide 5: Setting The Property/Casualty Market Standard
The St. Paul Travelers Companies Setting The Property/Casualty Market Standard The "Go-To" National Market Company Financial Strength Compatible Cultures and Track Record of Successful Transactions Paramount Objective - Driving Value Creation for Shareholders Management Appointments and Integration
Slide 6: Summary of Merger Terms
The St. Paul Travelers Companies Summary of Merger Terms Exchange Ratio 0.4334 St. Paul shares per Travelers share (Class A and B) Structure Tax-free merger Dividend Policy Ongoing dividend at the annual rate of $0.88 per share; Special cash dividend to SPC shareholders of record date prior to closi
Slide 7: The "Go-To" National Market Company
The "Go-To" National Market Company
Slide 8: Total Net Premiums Written
The St. Paul Travelers Companies Total Net Premiums Written ($ in billions) Source: Management estimates.
Slide 9: Market Share
The St. Paul Travelers Companies Market Share Source: A.M. Best. Based on 2002 direct premium written, excluding other accident & health.
Slide 10: Commercial Lines Ranking by Product
The St. Paul Travelers Companies Commercial Lines Ranking by Product Source: A.M. Best.
Slide 11: Commercial Lines Geographic Penetration
States (1) 1 st 22 2 nd 13 3 rd 8 4 th - 5 th 6 >5 th 2 The St. Paul Travelers Companies Commercial Lines Geographic Penetration St. Paul Travelers Combined #1 22 Top 2 positions 35 Top 3 positions 43 Top 5 positions 49 < Top 5 positions 2 Position # of States (1) Geographic Diversification P A Sour
Slide 12: Geographic Combination Travelers P&C and The St. Paul
Geographic Combination Travelers P&C (2002) The St. Paul (2002) Combined ____________________ Source: OneSource U.S. Insurance P&C Database: Schedule T. Over $200 million $100 to $200 million $50 to $100 million $25 to $50 million $1 to $25 million Under $1 million DPE Key The St. Paul Travelers Com
Slide 13: Geographic Combination Chubb, Hartford, SPC / TAP Combined
Geographic Combination Chubb Hartford SPC / TAP Combined ____________________ Source: OneSource U.S. Insurance P&C Database: Schedule T. Over $200 million $100 to $200 million $50 to $100 million $25 to $50 million $1 to $25 million Under $1 million DPE Key The St. Paul Travelers Companies Geographi
Slide 14: The "Go-To" Company for Independent Agents
Allianz/ Fireman's Fund 0.126 Cincinnati Financial 0.142 SAFECO 0.15 AIG 0.236 Zurich/ Farmers 0.299 CNA 0.315 St. Paul 0.331 Chubb 0.409 Hartford 0.417 Travelers 0.559 The St. Paul Travelers Companies The "Go-To" Company for Independent Agents Allmerica 0.079 Cincinnati Financial 0.079 Nationwide /
Slide 15: The "Go-To" Company for Independent Agents
Only 35% of business from top 100 agents Note: excludes Marsh, Aon, and Willis. Excludes National Accounts, Discover, Gulf, Northland, American Equity, and Associates Top 10 Top 25 Top 50 Top 100 St. Paul 0.223 0.335 0.417 0.514 Travelers 0.141 0.193 0.244 0.303 Combined 0.167 0.24 0.292 0.351 The S
Slide 16: The "Go-To" Company for Independent Agents
The St. Paul Travelers Companies The "Go-To" Company for Independent Agents Travelers Top 100 Agents St. Paul Top 100 Agents Less than 50 percent overlap
Slide 17: The "Go-To" Company for Independent Agents
The St. Paul Travelers Companies The "Go-To" Company for Independent Agents Combined Market Share Number of Brokers Included St. Paul Travelers Rank (number of brokers) St. Paul Travelers Rank (number of brokers) St. Paul Travelers Rank (number of brokers) St. Paul Travelers Rank (number of brokers)
Slide 18: Financial Strength
Financial Strength
Slide 19: Second Largest U.S. Insurer by Shareholders' Equity
The St. Paul Travelers Companies Second Largest U.S. Insurer by Shareholders' Equity Source: Company filings. Note: Statistics as of September 30, 2003. (1) Reflects pro forma purchase accounting adjustments. See Form S-4 filed December 10, 2003 ($ in billions)
Slide 20: Summary Financial Information
The St. Paul Travelers Companies Summary Financial Information Source: Company filings. (1) Reflects pro forma purchase accounting adjustments. See Form S-4 filed December 10, 2003. ($ in billions, except per share amounts)
Slide 21: Strong Capital Base
The St. Paul Travelers Companies Strong Capital Base ($ in billions) Source: Company filings. Note: Financial statistics as of September 30, 2003, except as noted. (1) Reflects pro forma purchase accounting adjustments. See Form S-4 filed December 10, 2003. (2) Excludes mandatory convertibles and hy
Slide 22: Investment Portfolio
The St. Paul Travelers Companies Investment Portfolio Aaa 0.54 Aa 0.18 A 0.12 Baa 0.1 Other 0.06 Homeowners' & Other 0.09 Personal Automobile 0.15 Other 0.07 Fidelity & Surety 0.06 International & Lloyd's 0.06 Total: $49.5 Billion Average Rating: Aa2/AA Fixed Maturity 0.82 Shorterm 0.08 Mortgage Loa
Slide 23: Compatible Cultures and Track Record of Successful Transactions
Compatible Cultures and Track Record of Successful Transactions
Slide 24: Highly Compatible Cultures
The St. Paul Travelers Companies Highly Compatible Cultures Both companies pursuing similar business strategies - an emphasis on independent agents and brokers Focus on underwriting, claims and actuarial disciplines Expense control - spend it like it's your own Commitment to performance measurement
Slide 25: Strong Combined Team Dedicated to Value Creation
The St. Paul Travelers Companies Strong Combined Team Dedicated to Value Creation Proven experience in integrating businesses Primerica / Travelers (1993) Travelers / Aetna P&C (1995) St. Paul / USF&G (1998) Travelers / Citicorp (1999) Reliance Surety (2000) RSA Financial Professional renewal rights
Slide 26: Paramount Objective - Driving Value Creation for Shareholders
Paramount Objective - Driving Value Creation for Shareholders
Slide 27: Estimated Financial Impact
The St. Paul Travelers Companies Estimated Financial Impact ($ in millions) Note: For illustrative purposes. (1) Estimates based on current First Call consensus for Travelers and St. Paul; assumed to be based on a fully diluted share base. Combined reflects addition of Travelers and St. Paul estimat
Slide 28: Significant Cost Savings
2004 2005 2006 44 146 228 The St. Paul Travelers Companies Significant Cost Savings Initial expected realized cost savings of $228 million after-tax projected by 2006 Projected to be 7-9% of controllable expenses Restructuring charge at the time of closing - initial estimate $300 - $400 million Proj
Slide 29: Management Appointments and Integration Planning
Management Appointments and Integration Planning
Slide 30: Management Announcements on November
Management Announcements on November 17 Robert Lipp Chairman Jay Fishman Chief Executive Officer Charles Clarke Vice Chairman John MacColl Vice Chairman & General Counsel Douglas Elliot CEO, General Commercial & Personal Lines T. Michael Miller CEO, Specialty Commercial William Heyman EVP, Chief Inv
Slide 31: Management Announcements on December
Management Announcements on December 2 Jay Benet EVP & Chief Financial Officer Andy Bessette EVP & Chief Administrative Officer William Bloom SVP & Chief Information Officer Thomas Bradley Financial Related Activities & Financial Reporting John Clifford SVP, Human Resources Irwin Ettinger Vice Chair
Slide 32: General Commercial and Personal Lines Management Announcements on December 16
John Albano National Accounts Dennis Crosby Middle Market Pete Higgins Middle Market Larry Illion Small Commercial Marc Schmittlein Small Commercial Joe Lacher Personal Lines Scott Belden Ceded Reinsurance General Commercial and Personal Lines Management Announcements on December 16
Slide 33: Specialty Commercial Management Announcements on December 16
Kevin Nish CAT Risk Bill Rohde Technology Rick Smith Foreign Risk Services and Global Accounts Doreen Spadorcia Surety/Bond Kevin Rehnberg SVP, Specialty Commercial Kent Urness EVP, Specialty Commercial Greg Vezzosi SVP, Specialty Commercial Chris Watson Gulf Bill Cunningham Construction Rich DeSimo
Slide 34: Integration Planning Process
The St. Paul Travelers Integration Planning Process Organizational dimensions All U.S. and Canadian insurance underwriting field structures Corporate staff Claim infrastructure and organization Home office underwriting support Systems infrastructure and organization Subsidiary operations Run-off ope
Slide 35: Planning Process Team Structure
The St. Paul Travelers Planning Process Team Structure
Slide 36: The "Go-To" National Market Company
The "Go-To" National Market Company Financial Strength Compatible Cultures and Track Record of Successful Transactions Paramount Objective ^ Driving Value Creation for Shareholders Setting the Property/ Casualty Market Standard The St. Paul Travelers Companies Setting the Property/Casualty Market St
Slide 37: Additional Information and Solicitation Notice
This filing may be deemed to be solicitation material in respect of the proposed merger of Travelers and The St. Paul. In connection with the proposed transaction, a registration statement on Form S-4 has been filed with the SEC. SHAREHOLDERS OF TRAVELERS AND SHAREHOLDERS OF THE ST. PAUL ARE ENCOURA
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