Very strong competitive position. Strong operating performance. Significantly improved operating company capital adequacy in 2005 that is now supportive of the current rating. Conservative financial leverage. Operating performance has been hampered by repeated reserve strengthening charges in recent years. Some lost sales momentum and organizational turmoil resulting from the 2004 integration of the former St. Paul and Travelers operations. The company faces several merger related class action lawsuits on behalf of the shareholders of the former Travelers Property Casualty Corp. The counterparty credit rating on The St. Paul Travelers Cos. (St. Paul Travelers) reflects its very strong market position, the improved earnings of its insurance subsidiaries, which provides for strong coverage of fixed obligations, the strong statutory capital adequacy of
