Exhibit 99.2
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The St. Paul Travelers Companies, Inc. |
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Financial Supplement - Third Quarter 2005 |
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On April 1, 2004, Travelers Property Casualty Corp. (Travelers) completed its previously announced merger into The St. Paul Companies, Inc. (St. Paul), forming The St. Paul Travelers Companies, Inc. (St. Paul Travelers). Each share of Travelers class A and class B common stock was exchanged for 0.4334 of a share of St. Paul Travelers common stock. For accounting purposes, this transaction is being accounted for as a reverse acquisition with Travelers treated as the accounting acquirer. Accordingly, the transaction is being accounted for as a purchase business combination, using Travelers historical financial information and applying fair value estimates to the acquired assets, liabilities and commitments of St. Paul as of April 1, 2004.
All historical information prior to April 1, 2004 included in this Financial Supplement represents the standalone results of Travelers as Travelers is treated as the accounting acquirer.
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Consolidated Results |
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Written and Earned Premiums - Property and Casualty Operations |
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Commercial |
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Specialty |
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Personal |
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Supplemental Detail |
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Glossary of Financial Measures and Description of Operating Segments |
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The St. Paul Travelers Companies, Inc.
($ in millions, except per share data)
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YTD |
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YTD |
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1Q |
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2Q |
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3Q |
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4Q |
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1Q |
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2Q |
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3Q |
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3Q |
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3Q |
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2004 |
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2004 |
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2004 |
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2004 |
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2005 |
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2005 |
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2005 |
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2004 |
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2005 |
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Income (loss) from continuing operations |
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$ |
587 |
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$ |
(302 |
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$ |
311 |
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$ |
271 |
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$ |
877 |
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$ |
931 |
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$ |
75 |
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$ |
596 |
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$ |
1,883 |
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Income (loss)
from continuing operations per |
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Basic |
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$ |
1.35 |
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$ |
(0.46 |
) |
$ |
0.46 |
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$ |
0.40 |
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$ |
1.31 |
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$ |
1.39 |
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$ |
0.11 |
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$ |
1.01 |
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$ |
2.79 |
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Diluted |
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$ |
1.31 |
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$ |
(0.46 |
) |
$ |
0.45 |
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$ |
0.39 |
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$ |
1.25 |
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$ |
1.33 |
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$ |
0.11 |
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$ |
1.00 |
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$ |
2.69 |
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Net income (loss) |
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$ |
587 |
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$ |
(275 |
) |
$ |
340 |
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$ |
303 |
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$ |
212 |
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$ |
1,069 |
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$ |
162 |
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$ |
652 |
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$ |
1,443 |
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Net income (loss) per share (1): |
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Basic |
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$ |
1.35 |
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$ |
(0.42 |
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$ |
0.51 |
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$ |
0.45 |
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$ |
0.31 |
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$ |
1.59 |
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$ |
0.24 |
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$ |
1.10 |
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$ |
2.14 |
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Diluted |
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$ |
1.31 |
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$ |
(0.42 |
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$ |
0.50 |
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$ |
0.44 |
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$ |
0.31 |
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$ |
1.52 |
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$ |
0.23 |
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$ |
1.09 |
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$ |
2.07 |
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Operating income (loss) |
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$ |
614 |
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$ |
(337 |
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$ |
343 |
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$ |
275 |
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$ |
859 |
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$ |
966 |
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$ |
50 |
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$ |
620 |
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$ |
1,875 |
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Operating income (loss) per share (1): |
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Basic |
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$ |
1.41 |
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$ |
(0.51 |
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$ |
0.51 |
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$ |
0.41 |
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$ |
1.28 |
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$ |
1.44 |
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$ |
0.07 |
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$ |
1.05 |
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$ |
2.78 |
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Diluted |
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$ |
1.37 |
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$ |
(0.51 |
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$ |
0.50 |
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$ |
0.40 |
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$ |
1.23 |
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$ |
1.38 |
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$ |
0.07 |
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$ |
1.04 |
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$ |
2.68 |
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Continuing operations return on equity |
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19.0 |
% |
(6.0 |
)% |
6.1 |
% |
5.2 |
% |
16.6 |
% |
17.4 |
% |
1.3 |
% |
4.5 |
% |
11.6 |
% |
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Return on equity |
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19.0 |
% |
(5.4 |
)% |
6.7 |
% |
5.8 |
% |
4.0 |
% |
20.0 |
% |
2.9 |
% |
4.9 |
% |
8.9 |
% |
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Operating return on equity |
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21.9 |
% |
(6.9 |
)% |
6.9 |
% |
5.5 |
% |
16.7 |
% |
18.6 |
% |
0.9 |
% |
4.9 |
% |
11.9 |
% |
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Total assets, at period end (2) |
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$ |
65,070 |
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$ |
106,046 |
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$ |
109,101 |
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$ |
111,246 |
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$ |
110,750 |
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$ |
111,804 |
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$ |
113,442 |
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$ |
109,101 |
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$ |
113,442 |
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Total equity, at period end |
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$ |
12,674 |
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$ |
19,930 |
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$ |
20,889 |
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$ |
21,201 |
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$ |
20,732 |
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$ |
22,369 |
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$ |
22,408 |
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$ |
20,889 |
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$ |
22,408 |
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Book value per share, at period end (1) |
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$ |
28.98 |
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$ |
29.52 |
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$ |
30.91 |
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$ |
31.35 |
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$ |
30.51 |
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$ |
32.90 |
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$ |
32.14 |
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$ |
30.91 |
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$ |
32.14 |
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Adjusted book value per share, at period end |
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$ |
26.18 |
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$ |
29.30 |
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$ |
29.63 |
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$ |
30.05 |
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$ |
30.10 |
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$ |
31.48 |
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$ |
31.46 |
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$ |
29.63 |
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$ |
31.46 |
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Weighted average number of common shares outstanding (basic) (1) |
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434.6 |
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664.8 |
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665.9 |
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666.8 |
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668.1 |
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669.5 |
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679.2 |
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588.7 |
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672.3 |
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Weighted average number of common shares outstanding and common stock equivalents (diluted) (1) |
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453.9 |
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664.8 |
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707.9 |
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708.6 |
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709.1 |
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710.3 |
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683.8 |
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607.0 |
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711.3 |
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Common shares outstanding at period end (1) |
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437.3 |
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668.5 |
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669.2 |
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670.3 |
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673.6 |
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674.6 |
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692.2 |
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669.2 |
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692.2 |
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Common stock dividends declared |
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$ |
81.7 |
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$ |
146.9 |
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$ |
147.1 |
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$ |
147.5 |
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$ |
148.2 |
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$ |
155.1 |
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$ |
159.1 |
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$ |
375.7 |
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$ |
462.4 |
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(1) The number of shares and per share amounts for 1Q 2004 and YTD 3Q 2004 have been restated to reflect the equivalent number of shares resulting from the exchange of Travelers common stock for St. Paul Travelers common stock due to the merger on April 1, 2004.
(2) As a result of a decrease in the Company’s ownership interest in Nuveen, the Company began applying the equity method of accounting for its investment in Nuveen in 2Q 2005. Accordingly, total assets for 2Q 2004 through 2Q 2005 have been reclassified. The company divested its remaining ownership interest in Nuveen in 3Q 2005.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
1
The St. Paul Travelers Companies, Inc.
Reconciliation to Net Income and Earnings Per Share
($ in millions, except earnings per share)
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YTD |
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YTD |
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1Q |
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2Q |
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3Q |
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4Q |
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1Q |
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2Q |
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3Q |
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3Q |
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3Q |
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2004 |
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2004 |
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2004 |
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2004 |
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2005 |
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2005 |
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2005 |
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2004 |
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2005 |
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Net income (loss) |
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Operating income (loss) |
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$ |
614 |
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$ |
(337 |
) |
$ |
343 |
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$ |
275 |
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$ |
859 |
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$ |
966 |
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$ |
50 |
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$ |
620 |
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$ |
1,875 |
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Net realized investment gains (losses) |
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(27 |
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35 |
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(32 |
) |
(4 |
) |
18 |
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(35 |
) |
25 |
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(24 |
) |
8 |
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Income (loss) from continuing operations |
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587 |
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(302 |
) |
311 |
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271 |
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877 |
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931 |
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75 |
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596 |
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1,883 |
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Discontinued operations |
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— |
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27 |
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29 |
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32 |
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(665 |
) |
138 |
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87 |
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56 |
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(440 |
) |
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Net income (loss) |
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$ |
587 |
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$ |
(275 |
) |
$ |
340 |
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$ |
303 |
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$ |
212 |
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$ |
1,069 |
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$ |
162 |
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$ |
652 |
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$ |
1,443 |
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Basic earnings per share (1) |
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Operating income (loss) |
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$ |
1.41 |
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$ |
(0.51 |
) |
$ |
0.51 |
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$ |
0.41 |
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$ |
1.28 |
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$ |
1.44 |
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$ |
0.07 |
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$ |
1.05 |
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$ |
2.78 |
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Net realized investment gains (losses) |
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(0.06 |
) |
0.05 |
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(0.05 |
) |
(0.01 |
) |
0.03 |
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(0.05 |
) |
0.04 |
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(0.04 |
) |
0.01 |
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Income (loss) from continuing operations |
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1.35 |
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(0.46 |
) |
0.46 |
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0.40 |
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1.31 |
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1.39 |
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0.11 |
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1.01 |
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2.79 |
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Discontinued operations |
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— |
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0.04 |
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0.05 |
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0.05 |
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(1.00 |
) |
0.20 |
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0.13 |
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0.09 |
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(0.65 |
) |
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Net income (loss) |
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$ |
1.35 |
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$ |
(0.42 |
) |
$ |
0.51 |
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$ |
0.45 |
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$ |
0.31 |
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$ |
1.59 |
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$ |
0.24 |
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$ |
1.10 |
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$ |
2.14 |
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Diluted earnings per share (1) |
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Operating income (loss) |
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$ |
1.37 |
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$ |
(0.51 |
) |
$ |
0.50 |
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$ |
0.40 |
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$ |
1.23 |
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$ |
1.38 |
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$ |
0.07 |
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$ |
1.04 |
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$ |
2.68 |
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Net realized investment gains (losses) |
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(0.06 |
) |
0.05 |
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(0.05 |
) |
(0.01 |
) |
0.02 |
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(0.05 |
) |
0.04 |
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(0.04 |
) |
0.01 |
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Income (loss) from continuing operations |
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1.31 |
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(0.46 |
) |
0.45 |
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0.39 |
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1.25 |
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1.33 |
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0.11 |
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1.00 |
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2.69 |
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Discontinued operations |
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— |
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0.04 |
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0.05 |
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0.05 |
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(0.94 |
) |
0.19 |
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0.12 |
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0.09 |
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(0.62 |
) |
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Net income (loss) |
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$ |
1.31 |
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$ |
(0.42 |
) |
$ |
0.50 |
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$ |
0.44 |
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$ |
0.31 |
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$ |
1.52 |
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$ |
0.23 |
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$ |
1.09 |
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$ |
2.07 |
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Adjustments to income from continuing
operations and weighted average shares
for income from continuing operations EPS calculation: (2)
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YTD |
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YTD |
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1Q |
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2Q |
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3Q |
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4Q |
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1Q |
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2Q |
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3Q |
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3Q |
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3Q |
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2004 |
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2004 |
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2004 |
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2004 |
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2005 |
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2005 |
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2005 |
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2004 |
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2005 |
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Basic |
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Income (loss) from continuing operations, as reported |
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$ |
587 |
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$ |
(302 |
) |
$ |
311 |
|
$ |
271 |
|
$ |
877 |
|
$ |
931 |
|
$ |
75 |
|
$ |
596 |
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$ |
1,883 |
|
Preferred stock dividends, net of taxes |
|
— |
|
(2 |
) |
(2 |
) |
(2 |
) |
(2 |
) |
(2 |
) |
(1 |
) |
(4 |
) |
(5 |
) |
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Income (loss) from continuing operations available to common shareholders - basic |
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$ |
587 |
|
$ |
(304 |
) |
$ |
309 |
|
$ |
269 |
|
$ |
875 |
|
$ |
929 |
|
$ |
74 |
|
$ |
592 |
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$ |
1,878 |
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Diluted |
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Income (loss) from continuing operations available to common shareholders - basic |
|
$ |
587 |
|
$ |
(304 |
) |
$ |
309 |
|
$ |
269 |
|
$ |
875 |
|
$ |
929 |
|
$ |
74 |
|
$ |
592 |
|
$ |
1,878 |
|
Effect of dilutive securities: |
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Equity unit stock purchase contracts |
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N/A |
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— |
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4 |
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4 |
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3 |
|
3 |
|
— |
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8 |
|
9 |
|
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Convertible preferred stock |
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N/A |
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— |
|
1 |
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1 |
|
2 |
|
2 |
|
— |
|
3 |
|
4 |
|
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Zero coupon convertible notes |
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N/A |
|
— |
|
1 |
|
1 |
|
1 |
|
1 |
|
— |
|
1 |
|
3 |
|
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Convertible junior subordinate notes |
|
— |
|
— |
|
7 |
|
7 |
|
7 |
|
7 |
|
— |
|
— |
|
20 |
|
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Income (loss) from continuing operations available to common shareholders - diluted |
|
$ |
587 |
|
$ |
(304 |
) |
$ |
322 |
|
$ |
282 |
|
$ |
888 |
|
$ |
942 |
|
$ |
74 |
|
$ |
604 |
|
$ |
1,914 |
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Common Shares |
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Basic |
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Weighted average shares outstanding |
|
435 |
|
665 |
|
666 |
|
667 |
|
668 |
|
669 |
|
679 |
|
589 |
|
672 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding |
|
435 |
|
665 |
|
666 |
|
667 |
|
668 |
|
669 |
|
679 |
|
589 |
|
672 |
|
|||||||||
Weighted average effects of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock options and other incentive plans |
|
3 |
|
— |
|
3 |
|
3 |
|
2 |
|
2 |
|
5 |
|
3 |
|
3 |
|
|||||||||
Equity unit stock purchase contracts |
|
N/A |
|
— |
|
15 |
|
15 |
|
15 |
|
15 |
|
— |
|
10 |
|
13 |
|
|||||||||
Convertible preferred stock |
|
N/A |
|
— |
|
5 |
|
5 |
|
5 |
|
4 |
|
— |
|
3 |
|
4 |
|
|||||||||
Zero coupon convertible notes |
|
N/A |
|
— |
|
2 |
|
2 |
|
2 |
|
2 |
|
— |
|
2 |
|
2 |
|
|||||||||
Convertible junior subordinate notes |
|
17 |
|
— |
|
17 |
|
17 |
|
17 |
|
17 |
|
— |
|
— |
|
17 |
|
|||||||||
Diluted weighted average shares outstanding |
|
454 |
|
665 |
|
708 |
|
709 |
|
709 |
|
710 |
|
684 |
|
607 |
|
711 |
|
(1) The number of shares and per share amounts for 1Q 2004 and YTD 3Q 2004 have been restated to reflect the equivalent number of shares resulting from the exchange of Travelers common stock for St. Paul Travelers common stock due to the merger on April 1, 2004.
(2) Adjustments to income from continuing operations and weighted average shares for income from continuing operations EPS calculation can also be used for the operating income and net income EPS calculations.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
2
The St. Paul Travelers Companies, Inc.
Statement of Income - Consolidated
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums |
|
$ |
3,339 |
|
$ |
5,154 |
|
$ |
5,269 |
|
$ |
5,276 |
|
$ |
5,119 |
|
$ |
5,109 |
|
$ |
4,977 |
|
$ |
13,762 |
|
$ |
15,205 |
|
Net investment income (1) |
|
619 |
|
642 |
|
667 |
|
735 |
|
765 |
|
775 |
|
812 |
|
1,928 |
|
2,352 |
|
|||||||||
Fee income |
|
172 |
|
171 |
|
186 |
|
177 |
|
171 |
|
165 |
|
169 |
|
529 |
|
505 |
|
|||||||||
Net realized investment gains (losses) |
|
(42 |
) |
55 |
|
(49 |
) |
(3 |
) |
— |
|
(55 |
) |
39 |
|
(36 |
) |
(16 |
) |
|||||||||
Other revenues |
|
39 |
|
38 |
|
56 |
|
43 |
|
50 |
|
43 |
|
45 |
|
133 |
|
138 |
|
|||||||||
Total revenues |
|
4,127 |
|
6,060 |
|
6,129 |
|
6,228 |
|
6,105 |
|
6,037 |
|
6,042 |
|
16,316 |
|
18,184 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and claim adjustment expenses |
|
2,281 |
|
4,869 |
|
4,086 |
|
4,203 |
|
3,223 |
|
3,101 |
|
4,361 |
|
11,236 |
|
10,685 |
|
|||||||||
Amortization of deferred acquisition costs |
|
526 |
|
805 |
|
820 |
|
827 |
|
810 |
|
783 |
|
830 |
|
2,151 |
|
2,423 |
|
|||||||||
General and administrative expenses |
|
467 |
|
864 |
|
792 |
|
822 |
|
813 |
|
789 |
|
789 |
|
2,123 |
|
2,391 |
|
|||||||||
Interest expense |
|
36 |
|
63 |
|
67 |
|
70 |
|
71 |
|
70 |
|
70 |
|
166 |
|
211 |
|
|||||||||
Total claims and expenses |
|
3,310 |
|
6,601 |
|
5,765 |
|
5,922 |
|
4,917 |
|
4,743 |
|
6,050 |
|
15,676 |
|
15,710 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income (loss) before income taxes and minority interest |
|
817 |
|
(541 |
) |
364 |
|
306 |
|
1,188 |
|
1,294 |
|
(8 |
) |
640 |
|
2,474 |
|
|||||||||
Income taxes |
|
227 |
|
(239 |
) |
48 |
|
33 |
|
311 |
|
363 |
|
(83 |
) |
36 |
|
591 |
|
|||||||||
Minority interest, net of tax |
|
3 |
|
— |
|
5 |
|
2 |
|
— |
|
— |
|
— |
|
8 |
|
— |
|
|||||||||
Income (loss) from continuing operations |
|
587 |
|
(302 |
) |
311 |
|
271 |
|
877 |
|
931 |
|
75 |
|
596 |
|
1,883 |
|
|||||||||
Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss), net of taxes |
|
— |
|
27 |
|
29 |
|
32 |
|
(665 |
) |
— |
|
2 |
|
56 |
|
(663 |
) |
|||||||||
Gain on disposal, net of taxes |
|
— |
|
— |
|
— |
|
— |
|
— |
|
138 |
|
85 |
|
— |
|
223 |
|
|||||||||
Income (loss) from discontinued operations (2) |
|
— |
|
27 |
|
29 |
|
32 |
|
(665 |
) |
138 |
|
87 |
|
56 |
|
(440 |
) |
|||||||||
Net income (loss) |
|
$ |
587 |
|
$ |
(275 |
) |
$ |
340 |
|
$ |
303 |
|
$ |
212 |
|
$ |
1,069 |
|
$ |
162 |
|
$ |
652 |
|
$ |
1,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate on net investment income |
|
26.6 |
% |
23.7 |
% |
23.0 |
% |
23.4 |
% |
23.9 |
% |
22.8 |
% |
23.0 |
% |
24.4 |
% |
23.2 |
% |
|||||||||
Net investment income (after-tax) |
|
$ |
454 |
|
$ |
490 |
|
$ |
514 |
|
$ |
562 |
|
$ |
583 |
|
$ |
598 |
|
$ |
625 |
|
$ |
1,458 |
|
$ |
1,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax |
|
$ |
20 |
|
$ |
24 |
|
$ |
612 |
|
$ |
116 |
|
$ |
31 |
|
$ |
11 |
|
$ |
1,524 |
|
$ |
656 |
|
$ |
1,566 |
|
After-tax |
|
$ |
13 |
|
$ |
16 |
|
$ |
402 |
|
$ |
80 |
|
$ |
20 |
|
$ |
8 |
|
$ |
1,009 |
|
$ |
431 |
|
$ |
1,037 |
|
(1) Includes $127 million of pre-tax net investment income in 1Q 2004 resulting from the impact of an initial public offering of a private equity investment. Commercial, Specialty and Personal include $82 million, $3 million and $42 million of pre-tax net investment income ($54 million, $2 million and $27 million after-tax), respectively, related to this private equity investment.
(2) In accordance with its plan to divest its equity ownership in Nuveen Investments, Nuveen Investments was accounted for as a discontinued operation beginning in 1Q 2005. Additionally, due to the taxable nature of the transaction, the Company recorded a charge of $687 million in discontinued operations in 1Q 2005, reflecting the difference between the tax basis and the GAAP carrying value of its investment in Nuveen Investments. A $138 million after-tax gain was recorded in 2Q 2005 related to the divestiture of 45.9 million shares of Nuveen Investments. An $85 million after-tax gain was recorded in 3Q 2005 related to the divesture of the remaining 27.5 million shares of Nuveen Investments.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
3
The St. Paul Travelers Companies, Inc.
Net Income by Major Component and Combined Ratio - Consolidated
($ in millions, net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Underwriting gain (loss) |
|
$ |
160 |
|
$ |
(789 |
) |
$ |
(155 |
) |
$ |
(263 |
) |
$ |
291 |
|
$ |
383 |
|
$ |
(555 |
) |
$ |
(784 |
) |
$ |
119 |
|
Net investment income |
|
454 |
|
490 |
|
514 |
|
562 |
|
583 |
|
598 |
|
625 |
|
1,458 |
|
1,806 |
|
|||||||||
Other, including interest expense (1) |
|
— |
|
(38 |
) |
(16 |
) |
(24 |
) |
(15 |
) |
(15 |
) |
(20 |
) |
(54 |
) |
(50 |
) |
|||||||||
Operating income (loss) |
|
614 |
|
(337 |
) |
343 |
|
275 |
|
859 |
|
966 |
|
50 |
|
620 |
|
1,875 |
|
|||||||||
Net realized investment gains (losses) |
|
(27 |
) |
35 |
|
(32 |
) |
(4 |
) |
18 |
|
(35 |
) |
25 |
|
(24 |
) |
8 |
|
|||||||||
Discontinued operations |
|
— |
|
27 |
|
29 |
|
32 |
|
(665 |
) |
138 |
|
87 |
|
56 |
|
(440 |
) |
|||||||||
Net income (loss) |
|
$ |
587 |
|
$ |
(275 |
) |
$ |
340 |
|
$ |
303 |
|
$ |
212 |
|
$ |
1,069 |
|
$ |
162 |
|
$ |
652 |
|
$ |
1,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP Combined Ratio (2,3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expense ratio |
|
65.8 |
% |
93.1 |
% |
75.8 |
% |
78.2 |
% |
61.3 |
% |
59.4 |
% |
86.3 |
% |
79.9 |
% |
68.8 |
% |
|||||||||
Underwriting expense ratio |
|
26.1 |
% |
29.6 |
% |
28.0 |
% |
28.9 |
% |
29.2 |
% |
28.2 |
% |
29.9 |
% |
28.1 |
% |
29.1 |
% |
|||||||||
Combined ratio |
|
91.9 |
% |
122.7 |
% |
103.8 |
% |
107.1 |
% |
90.5 |
% |
87.6 |
% |
116.2 |
% |
108.0 |
% |
97.9 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Impact of catastrophes on combined ratio |
|
0.6 |
% |
0.5 |
% |
11.6 |
% |
2.1 |
% |
0.6 |
% |
0.2 |
% |
30.3 |
% |
4.8 |
% |
10.2 |
% |
|||||||||
Impact of prior year reserve development on combined ratio |
|
1.3 |
% |
27.1 |
% |
1.6 |
% |
16.5 |
% |
-1.1 |
% |
-1.5 |
% |
-2.0 |
% |
11.1 |
% |
-1.6 |
% |
(1) Includes minority interests.
(2) Before policyholder dividends.
(3) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and other underwriting expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Billing and policy fees |
|
$ |
23 |
|
$ |
26 |
|
$ |
26 |
|
$ |
26 |
|
$ |
29 |
|
$ |
26 |
|
$ |
26 |
|
$ |
75 |
|
$ |
81 |
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expenses |
|
$ |
76 |
|
$ |
82 |
|
$ |
87 |
|
$ |
87 |
|
$ |
76 |
|
$ |
63 |
|
$ |
72 |
|
$ |
245 |
|
$ |
211 |
|
Other underwriting expenses |
|
96 |
|
89 |
|
99 |
|
90 |
|
95 |
|
102 |
|
97 |
|
284 |
|
294 |
|
|||||||||
Total fee income |
|
$ |
172 |
|
$ |
171 |
|
$ |
186 |
|
$ |
177 |
|
$ |
171 |
|
$ |
165 |
|
$ |
169 |
|
$ |
529 |
|
$ |
505 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
4
The St. Paul Travelers Companies, Inc.
Operating Income - Consolidated
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums |
|
$ |
3,339 |
|
$ |
5,154 |
|
$ |
5,269 |
|
$ |
5,276 |
|
$ |
5,119 |
|
$ |
5,109 |
|
$ |
4,977 |
|
$ |
13,762 |
|
$ |
15,205 |
|
Net investment income |
|
619 |
|
642 |
|
667 |
|
735 |
|
765 |
|
775 |
|
812 |
|
1,928 |
|
2,352 |
|
|||||||||
Fee income |
|
172 |
|
171 |
|
186 |
|
177 |
|
171 |
|
165 |
|
169 |
|
529 |
|
505 |
|
|||||||||
Other revenues |
|
39 |
|
38 |
|
56 |
|
43 |
|
50 |
|
43 |
|
45 |
|
133 |
|
138 |
|
|||||||||
Total revenues |
|
4,169 |
|
6,005 |
|
6,178 |
|
6,231 |
|
6,105 |
|
6,092 |
|
6,003 |
|
16,352 |
|
18,200 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and claim adjustment expenses |
|
2,281 |
|
4,869 |
|
4,086 |
|
4,203 |
|
3,223 |
|
3,101 |
|
4,361 |
|
11,236 |
|
10,685 |
|
|||||||||
Amortization of deferred acquisition costs |
|
526 |
|
805 |
|
820 |
|
827 |
|
810 |
|
783 |
|
830 |
|
2,151 |
|
2,423 |
|
|||||||||
General and administrative expenses |
|
467 |
|
864 |
|
792 |
|
822 |
|
813 |
|
789 |
|
789 |
|
2,123 |
|
2,391 |
|
|||||||||
Interest expense |
|
36 |
|
63 |
|
67 |
|
70 |
|
71 |
|
70 |
|
70 |
|
166 |
|
211 |
|
|||||||||
Total claims and expenses |
|
3,310 |
|
6,601 |
|
5,765 |
|
5,922 |
|
4,917 |
|
4,743 |
|
6,050 |
|
15,676 |
|
15,710 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) before income taxes and minority interest |
|
859 |
|
(596 |
) |
413 |
|
309 |
|
1,188 |
|
1,349 |
|
(47 |
) |
676 |
|
2,490 |
|
|||||||||
Income taxes |
|
242 |
|
(259 |
) |
65 |
|
32 |
|
329 |
|
383 |
|
(97 |
) |
48 |
|
615 |
|
|||||||||
Minority interest, net of tax |
|
3 |
|
— |
|
5 |
|
2 |
|
— |
|
— |
|
— |
|
8 |
|
— |
|
|||||||||
Operating income (loss) |
|
$ |
614 |
|
$ |
(337 |
) |
$ |
343 |
|
$ |
275 |
|
$ |
859 |
|
$ |
966 |
|
$ |
50 |
|
$ |
620 |
|
$ |
1,875 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
5
The St. Paul Travelers Companies, Inc.
Selected Statistics - Property and Casualty Operations
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
4,010 |
|
$ |
6,142 |
|
$ |
6,129 |
|
$ |
5,977 |
|
$ |
5,920 |
|
$ |
5,909 |
|
$ |
6,030 |
|
$ |
16,281 |
|
$ |
17,859 |
|
Net written premiums |
|
$ |
3,400 |
|
$ |
5,256 |
|
$ |
5,154 |
|
$ |
5,201 |
|
$ |
4,780 |
|
$ |
5,216 |
|
$ |
5,096 |
|
$ |
13,810 |
|
$ |
15,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earned premiums |
|
$ |
3,339 |
|
$ |
5,161 |
|
$ |
5,269 |
|
$ |
5,276 |
|
$ |
5,119 |
|
$ |
5,109 |
|
$ |
4,977 |
|
$ |
13,769 |
|
$ |
15,205 |
|
Losses and loss adjustment expenses |
|
2,209 |
|
4,818 |
|
4,040 |
|
4,139 |
|
3,127 |
|
3,033 |
|
4,334 |
|
11,067 |
|
10,494 |
|
|||||||||
Underwriting expenses |
|
903 |
|
1,603 |
|
1,420 |
|
1,406 |
|
1,435 |
|
1,461 |
|
1,437 |
|
3,926 |
|
4,333 |
|
|||||||||
Statutory underwriting gain (loss) |
|
227 |
|
(1,260 |
) |
(191 |
) |
(269 |
) |
557 |
|
615 |
|
(794 |
) |
(1,224 |
) |
378 |
|
|||||||||
Policyholder dividends |
|
6 |
|
(10 |
) |
7 |
|
(9 |
) |
7 |
|
6 |
|
(5 |
) |
3 |
|
8 |
|
|||||||||
Statutory underwriting gain (loss) after policyholder dividends |
|
$ |
221 |
|
$ |
(1,250 |
) |
$ |
(198 |
) |
$ |
(260 |
) |
$ |
550 |
|
$ |
609 |
|
$ |
(789 |
) |
$ |
(1,227 |
) |
$ |
370 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other statutory statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reserves for losses and loss adjustment expenses |
|
$ |
24,284 |
|
$ |
40,039 |
|
$ |
41,090 |
|
$ |
41,728 |
|
$ |
41,637 |
|
$ |
41,357 |
|
$ |
42,733 |
|
$ |
41,090 |
|
$ |
42,733 |
|
Increase (decrease) in reserves (1) |
|
$ |
255 |
|
$ |
15,755 |
|
$ |
1,051 |
|
$ |
638 |
|
$ |
(91 |
) |
$ |
(280 |
) |
$ |
1,376 |
|
$ |
17,061 |
|
$ |
1,005 |
|
Statutory surplus |
|
$ |
8,788 |
|
$ |
13,955 |
|
$ |
14,379 |
|
$ |
15,112 |
|
$ |
15,441 |
|
$ |
16,137 |
|
$ |
17,738 |
|
$ |
14,379 |
|
$ |
17,738 |
|
Net written premiums/surplus (2) |
|
1.54:1 |
|
1.51:1 |
|
1.45:1 |
|
1.38:1 |
|
1.32:1 |
|
1.26:1 |
|
1.14:1 |
|
1.45:1 |
|
1.14:1 |
|
(1) Includes the acquisition of St. Paul reserves as of April 1, 2004, totaling $13,713 million.
(2) 1Q 2004 based on 12 month rolling net written premiums. 2Q 2004 based on annualized current quarter net written premiums. 3Q 2004 based on annualized 2Q 2004 and 3Q 2004 net written premiums. 4Q 2004 based on annualized 2Q 2004, 3Q 2004 and 4Q 2004 net written premiums. 1Q, 2Q and 3Q 2005 based on 12 month rolling net written premiums.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
6
The St. Paul Travelers Companies, Inc.
Written and Earned Premiums - Property and Casualty Operations
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
As reported |
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
$ |
3,923 |
|
$ |
5,905 |
|
$ |
5,850 |
|
$ |
5,735 |
|
$ |
5,538 |
|
$ |
5,814 |
|
$ |
5,704 |
|
$ |
15,678 |
|
$ |
17,056 |
|
Assumed |
|
87 |
|
237 |
|
279 |
|
242 |
|
382 |
|
95 |
|
326 |
|
603 |
|
803 |
|
|||||||||
Gross |
|
4,010 |
|
6,142 |
|
6,129 |
|
5,977 |
|
5,920 |
|
5,909 |
|
6,030 |
|
16,281 |
|
17,859 |
|
|||||||||
Ceded |
|
(610 |
) |
(886 |
) |
(975 |
) |
(776 |
) |
(1,140 |
) |
(693 |
) |
(934 |
) |
(2,471 |
) |
(2,767 |
) |
|||||||||
Net |
|
$ |
3,400 |
|
$ |
5,256 |
|
$ |
5,154 |
|
$ |
5,201 |
|
$ |
4,780 |
|
$ |
5,216 |
|
$ |
5,096 |
|
$ |
13,810 |
|
$ |
15,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
$ |
3,758 |
|
$ |
5,909 |
|
$ |
5,971 |
|
$ |
5,913 |
|
$ |
5,732 |
|
$ |
5,720 |
|
$ |
5,680 |
|
$ |
15,638 |
|
$ |
17,132 |
|
Assumed |
|
102 |
|
332 |
|
264 |
|
309 |
|
291 |
|
235 |
|
289 |
|
698 |
|
815 |
|
|||||||||
Gross |
|
3,860 |
|
6,241 |
|
6,235 |
|
6,222 |
|
6,023 |
|
5,955 |
|
5,969 |
|
16,336 |
|
17,947 |
|
|||||||||
Ceded |
|
(521 |
) |
(1,087 |
) |
(966 |
) |
(946 |
) |
(904 |
) |
(846 |
) |
(992 |
) |
(2,574 |
) |
(2,742 |
) |
|||||||||
Net |
|
$ |
3,339 |
|
$ |
5,154 |
|
$ |
5,269 |
|
$ |
5,276 |
|
$ |
5,119 |
|
$ |
5,109 |
|
$ |
4,977 |
|
$ |
13,762 |
|
$ |
15,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
Proforma |
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Written premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
$ |
5,967 |
|
$ |
5,905 |
|
$ |
5,850 |
|
$ |
5,735 |
|
$ |
5,538 |
|
$ |
5,814 |
|
$ |
5,704 |
|
$ |
17,722 |
|
$ |
17,056 |
|
Assumed |
|
287 |
|
237 |
|
279 |
|
242 |
|
382 |
|
95 |
|
326 |
|
803 |
|
803 |
|
|||||||||
Gross |
|
6,254 |
|
6,142 |
|
6,129 |
|
5,977 |
|
5,920 |
|
5,909 |
|
6,030 |
|
18,525 |
|
17,859 |
|
|||||||||
Ceded |
|
(1,030 |
) |
(886 |
) |
(975 |
) |
(776 |
) |
(1,140 |
) |
(693 |
) |
(934 |
) |
(2,891 |
) |
(2,767 |
) |
|||||||||
Net |
|
$ |
5,224 |
|
$ |
5,256 |
|
$ |
5,154 |
|
$ |
5,201 |
|
$ |
4,780 |
|
$ |
5,216 |
|
$ |
5,096 |
|
$ |
15,634 |
|
$ |
15,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earned premiums |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
$ |
5,848 |
|
$ |
5,909 |
|
$ |
5,971 |
|
$ |
5,913 |
|
$ |
5,732 |
|
$ |
5,720 |
|
$ |
5,680 |
|
$ |
17,728 |
|
$ |
17,132 |
|
Assumed |
|
257 |
|
332 |
|
264 |
|
309 |
|
291 |
|
235 |
|
289 |
|
853 |
|
815 |
|
|||||||||
Gross |
|
6,105 |
|
6,241 |
|
6,235 |
|
6,222 |
|
6,023 |
|
5,955 |
|
5,969 |
|
18,581 |
|
17,947 |
|
|||||||||
Ceded |
|
(981 |
) |
(1,087 |
) |
(966 |
) |
(946 |
) |
(904 |
) |
(846 |
) |
(992 |
) |
(3,034 |
) |
(2,742 |
) |
|||||||||
Net |
|
$ |
5,124 |
|
$ |
5,154 |
|
$ |
5,269 |
|
$ |
5,276 |
|
$ |
5,119 |
|
$ |
5,109 |
|
$ |
4,977 |
|
$ |
15,547 |
|
$ |
15,205 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
7
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums |
|
$ |
1,731 |
|
$ |
2,411 |
|
$ |
2,364 |
|
$ |
2,310 |
|
$ |
2,204 |
|
$ |
2,164 |
|
$ |
2,078 |
|
$ |
6,506 |
|
$ |
6,446 |
|
Net investment income |
|
423 |
|
419 |
|
424 |
|
462 |
|
480 |
|
498 |
|
483 |
|
1,266 |
|
1,461 |
|
|||||||||
Fee income |
|
168 |
|
164 |
|
178 |
|
170 |
|
163 |
|
156 |
|
160 |
|
510 |
|
479 |
|
|||||||||
Other revenues |
|
14 |
|
12 |
|
23 |
|
6 |
|
15 |
|
13 |
|
19 |
|
49 |
|
47 |
|
|||||||||
Total revenues |
|
2,336 |
|
3,006 |
|
2,989 |
|
2,948 |
|
2,862 |
|
2,831 |
|
2,740 |
|
8,331 |
|
8,433 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and claim adjustment expenses |
|
1,198 |
|
1,789 |
|
1,986 |
|
2,551 |
|
1,522 |
|
1,397 |
|
2,112 |
|
4,973 |
|
5,031 |
|
|||||||||
Amortization of deferred acquisition costs |
|
254 |
|
335 |
|
330 |
|
326 |
|
317 |
|
306 |
|
320 |
|
919 |
|
943 |
|
|||||||||
General and administrative expenses |
|
287 |
|
455 |
|
419 |
|
417 |
|
419 |
|
397 |
|
419 |
|
1,161 |
|
1,235 |
|
|||||||||
Interest expense |
|
1 |
|
1 |
|
1 |
|
— |
|
— |
|
1 |
|
— |
|
3 |
|
1 |
|
|||||||||
Total claims and expenses |
|
1,740 |
|
2,580 |
|
2,736 |
|
3,294 |
|
2,258 |
|
2,101 |
|
2,851 |
|
7,056 |
|
7,210 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) before federal income taxes and minority interest |
|
596 |
|
426 |
|
253 |
|
(346 |
) |
604 |
|
730 |
|
(111 |
) |
1,275 |
|
1,223 |
|
|||||||||
Income taxes |
|
163 |
|
109 |
|
24 |
|
(164 |
) |
156 |
|
200 |
|
(97 |
) |
296 |
|
259 |
|
|||||||||
Minority interest, net of tax |
|
3 |
|
1 |
|
5 |
|
2 |
|
— |
|
— |
|
— |
|
9 |
|
— |
|
|||||||||
Operating income (loss) |
|
$ |
430 |
|
$ |
316 |
|
$ |
224 |
|
$ |
(184 |
) |
$ |
448 |
|
$ |
530 |
|
$ |
(14 |
) |
$ |
970 |
|
$ |
964 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
8
The St. Paul Travelers Companies, Inc.
Operating Income by Major Component and Combined Ratio - Commercial
($ in millions, net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Underwriting gain (loss) |
|
$ |
109 |
|
$ |
(15 |
) |
$ |
(114 |
) |
$ |
(542 |
) |
$ |
71 |
|
$ |
136 |
|
$ |
(400 |
) |
$ |
(20 |
) |
$ |
(193 |
) |
Net investment income |
|
314 |
|
324 |
|
327 |
|
356 |
|
367 |
|
385 |
|
375 |
|
965 |
|
1,127 |
|
|||||||||
Other, including minority interest |
|
7 |
|
7 |
|
11 |
|
2 |
|
10 |
|
9 |
|
11 |
|
25 |
|
30 |
|
|||||||||
Operating income (loss) |
|
$ |
430 |
|
$ |
316 |
|
$ |
224 |
|
$ |
(184 |
) |
$ |
448 |
|
$ |
530 |
|
$ |
(14 |
) |
$ |
970 |
|
$ |
964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP Combined ratio (1,2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expense ratio |
|
64.5 |
% |
71.6 |
% |
80.4 |
% |
106.9 |
% |
65.3 |
% |
61.7 |
% |
98.7 |
% |
72.9 |
% |
74.9 |
% |
|||||||||
Underwriting expense ratio |
|
25.9 |
% |
29.0 |
% |
27.5 |
% |
28.2 |
% |
29.1 |
% |
27.8 |
% |
31.0 |
% |
27.6 |
% |
29.3 |
% |
|||||||||
Combined ratio |
|
90.4 |
% |
100.6 |
% |
107.9 |
% |
135.1 |
% |
94.4 |
% |
89.5 |
% |
129.7 |
% |
100.5 |
% |
104.2 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Impact of catastrophes on combined ratio |
|
0.0 |
% |
0.0 |
% |
12.1 |
% |
3.4 |
% |
0.0 |
% |
0.0 |
% |
41.4 |
% |
4.4 |
% |
13.4 |
% |
|||||||||
Impact of prior year reserve development on combined ratio |
|
-0.3 |
% |
8.9 |
% |
4.9 |
% |
44.1 |
% |
0.3 |
% |
-0.5 |
% |
-0.3 |
% |
5.0 |
% |
-0.1 |
% |
(1) |
Before policyholder dividends. |
(2) |
Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and other underwriting expenses as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
||||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
||||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
||||||||||
|
Billing and policy fees |
|
$ |
2 |
|
$ |
4 |
|
$ |
3 |
|
$ |
4 |
|
$ |
4 |
|
$ |
2 |
|
$ |
4 |
|
$ |
9 |
|
$ |
10 |
|
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Loss and loss adjustment expenses |
|
$ |
77 |
|
$ |
77 |
|
$ |
83 |
|
$ |
83 |
|
$ |
72 |
|
$ |
59 |
|
$ |
68 |
|
$ |
237 |
|
$ |
199 |
|
|
Other underwriting expenses |
|
91 |
|
87 |
|
95 |
|
87 |
|
91 |
|
97 |
|
92 |
|
273 |
|
280 |
|
|||||||||
|
Total fee income |
|
$ |
168 |
|
$ |
164 |
|
$ |
178 |
|
$ |
170 |
|
$ |
163 |
|
$ |
156 |
|
$ |
160 |
|
$ |
510 |
|
$ |
479 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
9
The St. Paul Travelers Companies, Inc.
Selected Statistics - Commercial
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
2,213 |
|
$ |
2,799 |
|
$ |
2,854 |
|
$ |
2,770 |
|
$ |
2,751 |
|
$ |
2,481 |
|
$ |
2,644 |
|
$ |
7,866 |
|
$ |
7,876 |
|
Net written premiums |
|
$ |
1,765 |
|
$ |
2,234 |
|
$ |
2,131 |
|
$ |
2,181 |
|
$ |
2,192 |
|
$ |
2,047 |
|
$ |
1,989 |
|
$ |
6,130 |
|
$ |
6,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earned premiums |
|
$ |
1,731 |
|
$ |
2,411 |
|
$ |
2,364 |
|
$ |
2,310 |
|
$ |
2,204 |
|
$ |
2,164 |
|
$ |
2,078 |
|
$ |
6,506 |
|
$ |
6,446 |
|
Losses and loss adjustment expenses |
|
1,126 |
|
1,735 |
|
1,924 |
|
2,479 |
|
1,426 |
|
1,332 |
|
2,065 |
|
4,785 |
|
4,823 |
|
|||||||||
Underwriting expenses |
|
443 |
|
696 |
|
589 |
|
573 |
|
607 |
|
565 |
|
572 |
|
1,728 |
|
1,744 |
|
|||||||||
Statutory underwriting gain (loss) |
|
162 |
|
(20 |
) |
(149 |
) |
(742 |
) |
171 |
|
267 |
|
(559 |
) |
(7 |
) |
(121 |
) |
|||||||||
Policyholder dividends |
|
5 |
|
(15 |
) |
3 |
|
(1 |
) |
10 |
|
4 |
|
(7 |
) |
(7 |
) |
7 |
|
|||||||||
Statutory underwriting gain (loss) after policyholder dividends |
|
$ |
157 |
|
$ |
(5 |
) |
$ |
(152 |
) |
$ |
(741 |
) |
$ |
161 |
|
$ |
263 |
|
$ |
(552 |
) |
$ |
— |
|
$ |
(128 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate on net investment income |
|
25.7 |
% |
23.4 |
% |
22.6 |
% |
23.0 |
% |
23.6 |
% |
22.7 |
% |
22.3 |
% |
23.9 |
% |
22.9 |
% |
|||||||||
Net investment income (after-tax) |
|
$ |
314 |
|
$ |
324 |
|
$ |
327 |
|
$ |
356 |
|
$ |
367 |
|
$ |
385 |
|
$ |
375 |
|
$ |
965 |
|
$ |
1,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax |
|
$ |
— |
|
$ |
— |
|
$ |
286 |
|
$ |
77 |
|
$ |
— |
|
$ |
— |
|
$ |
867 |
|
$ |
286 |
|
$ |
867 |
|
After-tax |
|
$ |
— |
|
$ |
— |
|
$ |
185 |
|
$ |
50 |
|
$ |
— |
|
$ |
— |
|
$ |
563 |
|
$ |
185 |
|
$ |
563 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
10
The St. Paul Travelers Companies, Inc.
Net Written Premiums - Commercial
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial accounts |
|
$ |
848 |
|
$ |
1,116 |
|
$ |
1,075 |
|
$ |
1,171 |
|
$ |
1,127 |
|
$ |
1,068 |
|
$ |
1,022 |
|
$ |
3,039 |
|
$ |
3,217 |
|
Select accounts |
|
531 |
|
709 |
|
653 |
|
662 |
|
684 |
|
719 |
|
652 |
|
1,893 |
|
2,055 |
|
|||||||||
National accounts |
|
240 |
|
241 |
|
290 |
|
269 |
|
341 |
|
238 |
|
298 |
|
771 |
|
877 |
|
|||||||||
Total core |
|
1,619 |
|
2,066 |
|
2,018 |
|
2,102 |
|
2,152 |
|
2,025 |
|
1,972 |
|
5,703 |
|
6,149 |
|
|||||||||
Commercial other |
|
146 |
|
168 |
|
113 |
|
79 |
|
40 |
|
22 |
|
17 |
|
427 |
|
79 |
|
|||||||||
Total |
|
$ |
1,765 |
|
$ |
2,234 |
|
$ |
2,131 |
|
$ |
2,181 |
|
$ |
2,192 |
|
$ |
2,047 |
|
$ |
1,989 |
|
$ |
6,130 |
|
$ |
6,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial multi-peril |
|
$ |
606 |
|
$ |
610 |
|
$ |
618 |
|
$ |
683 |
|
$ |
733 |
|
$ |
681 |
|
$ |
681 |
|
$ |
1,834 |
|
$ |
2,095 |
|
Workers’ compensation |
|
350 |
|
374 |
|
403 |
|
403 |
|
464 |
|
367 |
|
378 |
|
1,127 |
|
1,209 |
|
|||||||||
Commercial automobile |
|
326 |
|
441 |
|
420 |
|
422 |
|
419 |
|
423 |
|
408 |
|
1,187 |
|
1,250 |
|
|||||||||
Property |
|
298 |
|
425 |
|
378 |
|
371 |
|
379 |
|
359 |
|
310 |
|
1,101 |
|
1,048 |
|
|||||||||
General liability |
|
182 |
|
362 |
|
302 |
|
284 |
|
185 |
|
205 |
|
195 |
|
846 |
|
585 |
|
|||||||||
Other |
|
3 |
|
22 |
|
10 |
|
18 |
|
12 |
|
12 |
|
17 |
|
35 |
|
41 |
|
|||||||||
Total |
|
$ |
1,765 |
|
$ |
2,234 |
|
$ |
2,131 |
|
$ |
2,181 |
|
$ |
2,192 |
|
$ |
2,047 |
|
$ |
1,989 |
|
$ |
6,130 |
|
$ |
6,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
National accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Additions to claim volume under administration (1) |
|
$ |
1,309 |
|
$ |
707 |
|
$ |
644 |
|
$ |
740 |
|
$ |
1,042 |
|
$ |
838 |
|
$ |
691 |
|
$ |
2,660 |
|
$ |
2,571 |
|
Written fees |
|
$ |
214 |
|
$ |
159 |
|
$ |
142 |
|
$ |
146 |
|
$ |
173 |
|
$ |
148 |
|
$ |
130 |
|
$ |
515 |
|
$ |
451 |
|
(1) Includes new and renewal business.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
11
The St. Paul Travelers Companies, Inc.
Proforma Gross and Net Written Premiums - Commercial
($ in millions)
This page displays proforma combined gross and net written premiums of Travelers and St. Paul, prior to the merger, and reported gross and net written premiums for St. Paul Travelers for second quarter 2004 and beyond.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
3,119 |
|
$ |
2,799 |
|
$ |
2,854 |
|
$ |
2,770 |
|
$ |
2,751 |
|
$ |
2,481 |
|
$ |
2,644 |
|
$ |
8,772 |
|
$ |
7,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial accounts |
|
$ |
1,280 |
|
$ |
1,116 |
|
$ |
1,075 |
|
$ |
1,171 |
|
$ |
1,127 |
|
$ |
1,068 |
|
$ |
1,022 |
|
$ |
3,471 |
|
$ |
3,217 |
|
Select accounts |
|
708 |
|
709 |
|
653 |
|
662 |
|
684 |
|
719 |
|
652 |
|
2,070 |
|
2,055 |
|
|||||||||
National accounts |
|
352 |
|
241 |
|
290 |
|
269 |
|
341 |
|
238 |
|
298 |
|
883 |
|
877 |
|
|||||||||
Total core |
|
2,340 |
|
2,066 |
|
2,018 |
|
2,102 |
|
2,152 |
|
2,025 |
|
1,972 |
|
6,424 |
|
6,149 |
|
|||||||||
Commercial other |
|
166 |
|
168 |
|
113 |
|
79 |
|
40 |
|
22 |
|
17 |
|
447 |
|
79 |
|
|||||||||
Total |
|
2,506 |
|
$ |
2,234 |
|
$ |
2,131 |
|
$ |
2,181 |
|
$ |
2,192 |
|
$ |
2,047 |
|
$ |
1,989 |
|
6,871 |
|
$ |
6,228 |
|
||
Less: Pre-merger St. Paul |
|
741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
741 |
|
|
|
|||||||||
Total Commercial excluding pre-merger St. Paul |
|
$ |
1,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
6,130 |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial multi-peril |
|
$ |
669 |
|
$ |
610 |
|
$ |
618 |
|
$ |
683 |
|
$ |
733 |
|
$ |
681 |
|
$ |
681 |
|
$ |
1,897 |
|
$ |
2,095 |
|
Workers’ compensation |
|
489 |
|
374 |
|
403 |
|
403 |
|
464 |
|
367 |
|
378 |
|
1,266 |
|
1,209 |
|
|||||||||
Commercial automobile |
|
459 |
|
441 |
|
420 |
|
422 |
|
419 |
|
423 |
|
408 |
|
1,320 |
|
1,250 |
|
|||||||||
Property |
|
516 |
|
425 |
|
378 |
|
371 |
|
379 |
|
359 |
|
310 |
|
1,319 |
|
1,048 |
|
|||||||||
General liability |
|
350 |
|
362 |
|
302 |
|
284 |
|
185 |
|
205 |
|
195 |
|
1,014 |
|
585 |
|
|||||||||
Other |
|
23 |
|
22 |
|
10 |
|
18 |
|
12 |
|
12 |
|
17 |
|
55 |
|
41 |
|
|||||||||
Total |
|
$ |
2,506 |
|
$ |
2,234 |
|
$ |
2,131 |
|
$ |
2,181 |
|
$ |
2,192 |
|
$ |
2,047 |
|
$ |
1,989 |
|
$ |
6,871 |
|
$ |
6,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
National accounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Additions to claim volume under administration (1) |
|
$ |
1,309 |
|
$ |
707 |
|
$ |
644 |
|
$ |
740 |
|
$ |
1,042 |
|
$ |
838 |
|
$ |
691 |
|
$ |
2,660 |
|
$ |
2,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Written fees |
|
$ |
218 |
|
$ |
159 |
|
$ |
142 |
|
$ |
146 |
|
$ |
173 |
|
$ |
148 |
|
$ |
130 |
|
$ |
519 |
|
$ |
451 |
|
Less: Pre-merger St. Paul |
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
|||||||||
Total written fees excluding pre-merger St. Paul |
|
$ |
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
515 |
|
|
|
(1) Includes new and renewal business.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
12
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums |
|
$ |
311 |
|
$ |
1,375 |
|
$ |
1,466 |
|
$ |
1,490 |
|
$ |
1,456 |
|
$ |
1,449 |
|
$ |
1,388 |
|
$ |
3,152 |
|
$ |
4,293 |
|
Net investment income |
|
51 |
|
129 |
|
149 |
|
158 |
|
170 |
|
173 |
|
204 |
|
329 |
|
547 |
|
|||||||||
Fee income |
|
4 |
|
7 |
|
8 |
|
7 |
|
8 |
|
9 |
|
9 |
|
19 |
|
26 |
|
|||||||||
Other revenues |
|
2 |
|
3 |
|
7 |
|
10 |
|
12 |
|
8 |
|
2 |
|
12 |
|
22 |
|
|||||||||
Total revenues |
|
368 |
|
1,514 |
|
1,630 |
|
1,665 |
|
1,646 |
|
1,639 |
|
1,603 |
|
3,512 |
|
4,888 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and claim adjustment expenses |
|
304 |
|
2,247 |
|
1,100 |
|
1,009 |
|
936 |
|
875 |
|
973 |
|
3,651 |
|
2,784 |
|
|||||||||
Amortization of deferred acquisition costs |
|
56 |
|
242 |
|
245 |
|
249 |
|
240 |
|
224 |
|
243 |
|
543 |
|
707 |
|
|||||||||
General and administrative expenses |
|
58 |
|
249 |
|
233 |
|
239 |
|
233 |
|
230 |
|
203 |
|
540 |
|
666 |
|
|||||||||
Total claims and expenses |
|
418 |
|
2,738 |
|
1,578 |
|
1,497 |
|
1,409 |
|
1,329 |
|
1,419 |
|
4,734 |
|
4,157 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income (loss) before federal income taxes |
|
(50 |
) |
(1,224 |
) |
52 |
|
168 |
|
237 |
|
310 |
|
184 |
|
(1,222 |
) |
731 |
|
|||||||||
Income taxes |
|
(22 |
) |
(434 |
) |
14 |
|
36 |
|
64 |
|
89 |
|
54 |
|
(442 |
) |
207 |
|
|||||||||
Operating income (loss) |
|
$ |
(28 |
) |
$ |
(790 |
) |
$ |
38 |
|
$ |
132 |
|
$ |
173 |
|
$ |
221 |
|
$ |
130 |
|
$ |
(780 |
) |
$ |
524 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
13
The St. Paul Travelers Companies, Inc.
Operating Income by Major Component and Combined Ratio - Specialty
($ in millions, net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Underwriting gain (loss) |
|
$ |
(68 |
) |
$ |
(887 |
) |
$ |
(82 |
) |
$ |
1 |
|
$ |
34 |
|
$ |
82 |
|
$ |
(26 |
) |
$ |
(1,037 |
) |
$ |
90 |
|
Net investment income |
|
38 |
|
95 |
|
113 |
|
120 |
|
129 |
|
133 |
|
155 |
|
246 |
|
417 |
|
|||||||||
Other |
|
2 |
|
2 |
|
7 |
|
11 |
|
10 |
|
6 |
|
1 |
|
11 |
|
17 |
|
|||||||||
Operating income (loss) |
|
$ |
(28 |
) |
$ |
(790 |
) |
$ |
38 |
|
$ |
132 |
|
$ |
173 |
|
$ |
221 |
|
$ |
130 |
|
$ |
(780 |
) |
$ |
524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP Combined ratio (1,2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expense ratio |
|
97.7 |
% |
162.8 |
% |
74.5 |
% |
67.9 |
% |
64.3 |
% |
59.9 |
% |
69.7 |
% |
115.3 |
% |
64.5 |
% |
|||||||||
Underwriting expense ratio |
|
35.2 |
% |
35.5 |
% |
32.2 |
% |
32.6 |
% |
32.0 |
% |
31.0 |
% |
31.7 |
% |
34.0 |
% |
31.6 |
% |
|||||||||
Combined ratio |
|
132.9 |
% |
198.3 |
% |
106.7 |
% |
100.5 |
% |
96.3 |
% |
90.9 |
% |
101.4 |
% |
149.3 |
% |
96.1 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Impact of catastrophes on combined ratio |
|
0.0 |
% |
0.0 |
% |
12.5 |
% |
2.4 |
% |
1.3 |
% |
0.0 |
% |
11.9 |
% |
5.8 |
% |
4.3 |
% |
|||||||||
Impact of prior year reserve development on combined ratio |
|
48.2 |
% |
93.4 |
% |
0.2 |
% |
-0.7 |
% |
3.6 |
% |
1.1 |
% |
-0.9 |
% |
45.7 |
% |
1.3 |
% |
(1) Before policyholder dividends.
(2) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. In addition, fee income is allocated as a reduction of losses and loss adjustment expenses and other underwriting expenses as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Billing and policy fees |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
2 |
|
$ |
1 |
|
$ |
(1 |
) |
$ |
— |
|
$ |
2 |
|
Fee income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expenses |
|
$ |
(1 |
) |
$ |
5 |
|
$ |
4 |
|
$ |
4 |
|
$ |
4 |
|
$ |
4 |
|
$ |
4 |
|
$ |
8 |
|
$ |
12 |
|
Other underwriting expenses |
|
5 |
|
2 |
|
4 |
|
3 |
|
4 |
|
5 |
|
5 |
|
11 |
|
14 |
|
|||||||||
Total fee income |
|
$ |
4 |
|
$ |
7 |
|
$ |
8 |
|
$ |
7 |
|
$ |
8 |
|
$ |
9 |
|
$ |
9 |
|
$ |
19 |
|
$ |
26 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
14
The St. Paul Travelers Companies, Inc.
Selected Statistics - Specialty
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
398 |
|
$ |
1,743 |
|
$ |
1,640 |
|
$ |
1,730 |
|
$ |
1,691 |
|
$ |
1,758 |
|
$ |
1,654 |
|
$ |
3,781 |
|
$ |
5,103 |
|
Net written premiums |
|
$ |
269 |
|
$ |
1,463 |
|
$ |
1,451 |
|
$ |
1,588 |
|
$ |
1,154 |
|
$ |
1,545 |
|
$ |
1,480 |
|
$ |
3,183 |
|
$ |
4,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earned premiums |
|
$ |
311 |
|
$ |
1,382 |
|
$ |
1,466 |
|
$ |
1,490 |
|
$ |
1,456 |
|
$ |
1,449 |
|
$ |
1,388 |
|
$ |
3,159 |
|
$ |
4,293 |
|
Losses and loss adjustment expenses |
|
304 |
|
2,254 |
|
1,113 |
|
1,016 |
|
936 |
|
872 |
|
994 |
|
3,671 |
|
2,802 |
|
|||||||||
Underwriting expenses |
|
114 |
|
510 |
|
426 |
|
437 |
|
426 |
|
453 |
|
413 |
|
1,050 |
|
1,292 |
|
|||||||||
Statutory underwriting gain (loss) |
|
(107 |
) |
(1,382 |
) |
(73 |
) |
37 |
|
94 |
|
124 |
|
(19 |
) |
(1,562 |
) |
199 |
|
|||||||||
Policyholder dividends |
|
1 |
|
5 |
|
4 |
|
(8 |
) |
(3 |
) |
2 |
|
2 |
|
10 |
|
1 |
|
|||||||||
Statutory underwriting gain (loss) after policyholder dividends |
|
$ |
(108 |
) |
$ |
(1,387 |
) |
$ |
(77 |
) |
$ |
45 |
|
$ |
97 |
|
$ |
122 |
|
$ |
(21 |
) |
$ |
(1,572 |
) |
$ |
198 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate on net investment income |
|
25.2 |
% |
25.8 |
% |
24.6 |
% |
23.9 |
% |
23.9 |
% |
23.4 |
% |
23.7 |
% |
25.1 |
% |
23.7 |
% |
|||||||||
Net investment income (after-tax) |
|
$ |
38 |
|
$ |
95 |
|
$ |
113 |
|
$ |
120 |
|
$ |
129 |
|
$ |
133 |
|
$ |
155 |
|
$ |
246 |
|
$ |
417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax |
|
$ |
— |
|
$ |
— |
|
$ |
184 |
|
$ |
36 |
|
$ |
19 |
|
$ |
— |
|
$ |
169 |
|
$ |
184 |
|
$ |
188 |
|
After-tax |
|
$ |
— |
|
$ |
— |
|
$ |
125 |
|
$ |
28 |
|
$ |
13 |
|
$ |
— |
|
$ |
129 |
|
$ |
125 |
|
$ |
142 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
15
The St. Paul Travelers Companies, Inc.
Net Written Premiums - Specialty
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction |
|
$ |
126 |
|
$ |
274 |
|
$ |
194 |
|
$ |
250 |
|
$ |
250 |
|
$ |
261 |
|
$ |
179 |
|
$ |
594 |
|
$ |
690 |
|
Bond |
|
142 |
|
304 |
|
378 |
|
359 |
|
163 |
|
368 |
|
391 |
|
824 |
|
922 |
|
|||||||||
Financial & Professional Services |
|
— |
|
184 |
|
221 |
|
231 |
|
120 |
|
232 |
|
247 |
|
405 |
|
599 |
|
|||||||||
Other |
|
— |
|
341 |
|
416 |
|
429 |
|
357 |
|
388 |
|
440 |
|
757 |
|
1,185 |
|
|||||||||
Total Domestic Specialty |
|
268 |
|
1,103 |
|
1,209 |
|
1,269 |
|
890 |
|
1,249 |
|
1,257 |
|
2,580 |
|
3,396 |
|
|||||||||
International Specialty |
|
1 |
|
360 |
|
242 |
|
319 |
|
264 |
|
296 |
|
223 |
|
603 |
|
783 |
|
|||||||||
Total |
|
$ |
269 |
|
$ |
1,463 |
|
$ |
1,451 |
|
$ |
1,588 |
|
$ |
1,154 |
|
$ |
1,545 |
|
$ |
1,480 |
|
$ |
3,183 |
|
$ |
4,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Workers’ compensation |
|
$ |
28 |
|
$ |
119 |
|
$ |
103 |
|
$ |
131 |
|
$ |
119 |
|
$ |
124 |
|
$ |
79 |
|
$ |
250 |
|
$ |
322 |
|
Commercial automobile |
|
30 |
|
113 |
|
120 |
|
127 |
|
92 |
|
95 |
|
94 |
|
263 |
|
281 |
|
|||||||||
Property |
|
5 |
|
88 |
|
107 |
|
96 |
|
136 |
|
141 |
|
142 |
|
200 |
|
419 |
|
|||||||||
General liability |
|
71 |
|
462 |
|
466 |
|
548 |
|
375 |
|
579 |
|
575 |
|
999 |
|
1,529 |
|
|||||||||
Fidelity & Surety |
|
91 |
|
241 |
|
327 |
|
290 |
|
130 |
|
296 |
|
320 |
|
659 |
|
746 |
|
|||||||||
Commercial multi-peril |
|
43 |
|
80 |
|
86 |
|
77 |
|
38 |
|
14 |
|
47 |
|
209 |
|
99 |
|
|||||||||
International |
|
1 |
|
360 |
|
242 |
|
319 |
|
264 |
|
296 |
|
223 |
|
603 |
|
783 |
|
|||||||||
Total |
|
$ |
269 |
|
$ |
1,463 |
|
$ |
1,451 |
|
$ |
1,588 |
|
$ |
1,154 |
|
$ |
1,545 |
|
$ |
1,480 |
|
$ |
3,183 |
|
$ |
4,179 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
16
The St. Paul Travelers Companies, Inc.
Proforma Gross and Net Written Premiums - Specialty
($ in millions)
This page displays proforma combined gross and net written premiums of Travelers and St. Paul, prior to the merger, and reported gross and net written premiums for St. Paul Travelers for second quarter 2004 and beyond.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
1,736 |
|
$ |
1,743 |
|
$ |
1,640 |
|
$ |
1,730 |
|
$ |
1,691 |
|
$ |
1,758 |
|
$ |
1,654 |
|
$ |
5,119 |
|
$ |
5,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by market |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Construction |
|
$ |
325 |
|
$ |
274 |
|
$ |
194 |
|
$ |
250 |
|
$ |
250 |
|
$ |
261 |
|
$ |
179 |
|
$ |
793 |
|
$ |
690 |
|
Bond |
|
167 |
|
304 |
|
378 |
|
359 |
|
163 |
|
368 |
|
391 |
|
849 |
|
922 |
|
|||||||||
Financial & Professional Services |
|
163 |
|
184 |
|
221 |
|
231 |
|
120 |
|
232 |
|
247 |
|
568 |
|
599 |
|
|||||||||
Other |
|
402 |
|
341 |
|
416 |
|
429 |
|
357 |
|
388 |
|
440 |
|
1,159 |
|
1,185 |
|
|||||||||
Total Domestic Specialty |
|
1,057 |
|
1,103 |
|
1,209 |
|
1,269 |
|
890 |
|
1,249 |
|
1,257 |
|
3,369 |
|
3,396 |
|
|||||||||
International Specialty |
|
295 |
|
360 |
|
242 |
|
319 |
|
264 |
|
296 |
|
223 |
|
897 |
|
783 |
|
|||||||||
Total |
|
1,352 |
|
$ |
1,463 |
|
$ |
1,451 |
|
$ |
1,588 |
|
$ |
1,154 |
|
$ |
1,545 |
|
$ |
1,480 |
|
4,266 |
|
$ |
4,179 |
|
||
Less: Pre-merger St. Paul |
|
1,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,083 |
|
|
|
|||||||||
Total Specialty excluding pre-merger St. Paul |
|
$ |
269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,183 |
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net written premiums by product line |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Workers’ compensation |
|
$ |
141 |
|
$ |
119 |
|
$ |
103 |
|
$ |
130 |
|
$ |
119 |
|
$ |
124 |
|
$ |
79 |
|
$ |
363 |
|
$ |
322 |
|
Commercial automobile |
|
146 |
|
113 |
|
120 |
|
126 |
|
92 |
|
95 |
|
94 |
|
379 |
|
281 |
|
|||||||||
Property |
|
101 |
|
88 |
|
107 |
|
96 |
|
136 |
|
141 |
|
142 |
|
296 |
|
419 |
|
|||||||||
General liability |
|
450 |
|
462 |
|
466 |
|
550 |
|
375 |
|
579 |
|
575 |
|
1,378 |
|
1,529 |
|
|||||||||
Fidelity & Surety |
|
132 |
|
241 |
|
327 |
|
290 |
|
130 |
|
296 |
|
320 |
|
700 |
|
746 |
|
|||||||||
Commercial multi-peril |
|
87 |
|
80 |
|
86 |
|
77 |
|
38 |
|
14 |
|
47 |
|
253 |
|
99 |
|
|||||||||
International |
|
295 |
|
360 |
|
242 |
|
319 |
|
264 |
|
296 |
|
223 |
|
897 |
|
783 |
|
|||||||||
Total |
|
$ |
1,352 |
|
$ |
1,463 |
|
$ |
1,451 |
|
$ |
1,588 |
|
$ |
1,154 |
|
$ |
1,545 |
|
$ |
1,480 |
|
$ |
4,266 |
|
$ |
4,179 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
17
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Premiums |
|
$ |
1,297 |
|
$ |
1,368 |
|
$ |
1,439 |
|
$ |
1,476 |
|
$ |
1,459 |
|
$ |
1,496 |
|
$ |
1,511 |
|
$ |
4,104 |
|
$ |
4,466 |
|
Net investment income |
|
145 |
|
93 |
|
92 |
|
112 |
|
109 |
|
116 |
|
112 |
|
330 |
|
337 |
|
|||||||||
Other revenues |
|
23 |
|
21 |
|
22 |
|
25 |
|
24 |
|
23 |
|
24 |
|
66 |
|
71 |
|
|||||||||
Total revenues |
|
1,465 |
|
1,482 |
|
1,553 |
|
1,613 |
|
1,592 |
|
1,635 |
|
1,647 |
|
4,500 |
|
4,874 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and claim adjustment expenses |
|
779 |
|
833 |
|
1,000 |
|
643 |
|
765 |
|
829 |
|
1,276 |
|
2,612 |
|
2,870 |
|
|||||||||
Amortization of deferred acquisition costs |
|
216 |
|
228 |
|
245 |
|
252 |
|
253 |
|
253 |
|
267 |
|
689 |
|
773 |
|
|||||||||
General and administrative expenses |
|
119 |
|
132 |
|
129 |
|
156 |
|
154 |
|
162 |
|
162 |
|
380 |
|
478 |
|
|||||||||
Total claims and expenses |
|
1,114 |
|
1,193 |
|
1,374 |
|
1,051 |
|
1,172 |
|
1,244 |
|
1,705 |
|
3,681 |
|
4,121 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating income before federal income taxes |
|
351 |
|
289 |
|
179 |
|
562 |
|
420 |
|
391 |
|
(58 |
) |
819 |
|
753 |
|
|||||||||
Income taxes |
|
114 |
|
92 |
|
52 |
|
184 |
|
135 |
|
125 |
|
(33 |
) |
258 |
|
227 |
|
|||||||||
Operating income |
|
$ |
237 |
|
$ |
197 |
|
$ |
127 |
|
$ |
378 |
|
$ |
285 |
|
$ |
266 |
|
$ |
(25 |
) |
$ |
561 |
|
$ |
526 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
18
The St. Paul Travelers Companies, Inc.
Operating Income by Major Component and Combined Ratio - Personal
($ in millions, net of tax)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Underwriting gain |
|
$ |
119 |
|
$ |
113 |
|
$ |
41 |
|
$ |
278 |
|
$ |
186 |
|
$ |
164 |
|
$ |
(127 |
) |
$ |
273 |
|
$ |
223 |
|
Net investment income |
|
102 |
|
70 |
|
72 |
|
85 |
|
83 |
|
88 |
|
86 |
|
244 |
|
257 |
|
|||||||||
Other |
|
16 |
|
14 |
|
14 |
|
15 |
|
16 |
|
14 |
|
16 |
|
44 |
|
46 |
|
|||||||||
Operating income |
|
$ |
237 |
|
$ |
197 |
|
$ |
127 |
|
$ |
378 |
|
$ |
285 |
|
$ |
266 |
|
$ |
(25 |
) |
$ |
561 |
|
$ |
526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP Combined ratio (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expense ratio |
|
60.1 |
% |
60.9 |
% |
69.5 |
% |
43.6 |
% |
52.4 |
% |
55.4 |
% |
84.5 |
% |
63.6 |
% |
64.2 |
% |
|||||||||
Underwriting expense ratio |
|
24.2 |
% |
24.7 |
% |
24.5 |
% |
26.1 |
% |
26.3 |
% |
26.2 |
% |
26.8 |
% |
24.5 |
% |
26.5 |
% |
|||||||||
Combined ratio |
|
84.3 |
% |
85.6 |
% |
94.0 |
% |
69.7 |
% |
78.7 |
% |
81.6 |
% |
111.3 |
% |
88.1 |
% |
90.7 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Impact of catastrophes on combined ratio |
|
1.5 |
% |
1.8 |
% |
9.9 |
% |
0.2 |
% |
0.8 |
% |
0.7 |
% |
32.1 |
% |
4.5 |
% |
11.4 |
% |
|||||||||
Impact of prior year reserve development on combined ratio |
|
-7.8 |
% |
-7.3 |
% |
-2.6 |
% |
-9.5 |
% |
-7.8 |
% |
-5.4 |
% |
-5.5 |
% |
-5.8 |
% |
-6.3 |
% |
(1) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. Billing and policy fees are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Billing and policy fees |
|
$ |
21 |
|
$ |
22 |
|
$ |
23 |
|
$ |
22 |
|
$ |
23 |
|
$ |
23 |
|
$ |
23 |
|
$ |
66 |
|
$ |
69 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
19
The St. Paul Travelers Companies, Inc.
Selected Statistics - Personal
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
1,399 |
|
$ |
1,600 |
|
$ |
1,635 |
|
$ |
1,477 |
|
$ |
1,478 |
|
$ |
1,670 |
|
$ |
1,732 |
|
$ |
4,634 |
|
$ |
4,880 |
|
Net written premiums |
|
$ |
1,366 |
|
$ |
1,559 |
|
$ |
1,572 |
|
$ |
1,432 |
|
$ |
1,434 |
|
$ |
1,624 |
|
$ |
1,627 |
|
$ |
4,497 |
|
$ |
4,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earned premiums |
|
$ |
1,297 |
|
$ |
1,368 |
|
$ |
1,439 |
|
$ |
1,476 |
|
$ |
1,459 |
|
$ |
1,496 |
|
$ |
1,511 |
|
$ |
4,104 |
|
$ |
4,466 |
|
Losses and loss adjustment expenses |
|
779 |
|
829 |
|
1,003 |
|
644 |
|
765 |
|
829 |
|
1,275 |
|
2,611 |
|
2,869 |
|
|||||||||
Underwriting expenses |
|
346 |
|
397 |
|
405 |
|
396 |
|
402 |
|
443 |
|
452 |
|
1,148 |
|
1,297 |
|
|||||||||
Statutory underwriting gain (loss) |
|
$ |
172 |
|
$ |
142 |
|
$ |
31 |
|
$ |
436 |
|
$ |
292 |
|
$ |
224 |
|
$ |
(216 |
) |
$ |
345 |
|
$ |
300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other statistics |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate on net investment income |
|
29.6 |
% |
24.2 |
% |
22.6 |
% |
23.7 |
% |
24.2 |
% |
24.0 |
% |
22.9 |
% |
26.2 |
% |
23.7 |
% |
|||||||||
Net investment income (after-tax) |
|
$ |
102 |
|
$ |
70 |
|
$ |
72 |
|
$ |
85 |
|
$ |
83 |
|
$ |
88 |
|
$ |
86 |
|
$ |
244 |
|
$ |
257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Catastrophes, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax |
|
$ |
20 |
|
$ |
24 |
|
$ |
142 |
|
$ |
3 |
|
$ |
12 |
|
$ |
11 |
|
$ |
488 |
|
$ |
186 |
|
$ |
511 |
|
After-tax |
|
$ |
13 |
|
$ |
16 |
|
$ |
92 |
|
$ |
2 |
|
$ |
7 |
|
$ |
8 |
|
$ |
317 |
|
$ |
121 |
|
$ |
332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Policies in force (in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Automobile |
|
2,157 |
|
2,234 |
|
2,260 |
|
2,264 |
|
2,270 |
|
2,281 |
|
2,307 |
|
2,260 |
|
2,307 |
|
|||||||||
Homeowners and other |
|
3,617 |
|
3,776 |
|
3,916 |
|
4,011 |
|
4,038 |
|
4,090 |
|
4,150 |
|
3,916 |
|
4,150 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
20
The St. Paul Travelers Companies, Inc.
Selected Statistics - Personal (Automobile)
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
854 |
|
$ |
900 |
|
$ |
897 |
|
$ |
819 |
|
$ |
870 |
|
$ |
888 |
|
$ |
910 |
|
$ |
2,651 |
|
$ |
2,668 |
|
Net written premiums |
|
$ |
847 |
|
$ |
893 |
|
$ |
884 |
|
$ |
809 |
|
$ |
854 |
|
$ |
878 |
|
$ |
897 |
|
$ |
2,624 |
|
$ |
2,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earned premiums |
|
$ |
782 |
|
$ |
825 |
|
$ |
851 |
|
$ |
862 |
|
$ |
840 |
|
$ |
851 |
|
$ |
864 |
|
$ |
2,458 |
|
$ |
2,555 |
|
Losses and loss adjustment expenses |
|
577 |
|
596 |
|
617 |
|
468 |
|
505 |
|
542 |
|
525 |
|
1,790 |
|
1,572 |
|
|||||||||
Underwriting expenses |
|
199 |
|
205 |
|
207 |
|
206 |
|
213 |
|
222 |
|
224 |
|
611 |
|
659 |
|
|||||||||
Statutory underwriting gain (loss) |
|
$ |
6 |
|
$ |
24 |
|
$ |
27 |
|
$ |
188 |
|
$ |
122 |
|
$ |
87 |
|
$ |
115 |
|
$ |
57 |
|
$ |
324 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP Combined ratio (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expense ratio |
|
73.7 |
% |
72.7 |
% |
72.1 |
% |
54.3 |
% |
60.1 |
% |
63.6 |
% |
60.9 |
% |
72.8 |
% |
61.6 |
% |
|||||||||
Underwriting expense ratio |
|
22.7 |
% |
22.4 |
% |
22.3 |
% |
24.0 |
% |
23.5 |
% |
24.0 |
% |
23.9 |
% |
22.4 |
% |
23.8 |
% |
|||||||||
Combined ratio |
|
96.4 |
% |
95.1 |
% |
94.4 |
% |
78.3 |
% |
83.6 |
% |
87.6 |
% |
84.8 |
% |
95.2 |
% |
85.4 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Impact of catastrophes on combined ratio |
|
0.0 |
% |
0.0 |
% |
0.6 |
% |
0.3 |
% |
0.0 |
% |
0.0 |
% |
1.2 |
% |
0.2 |
% |
0.4 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Catastrophe losses, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax |
|
$ |
— |
|
$ |
— |
|
$ |
5 |
|
$ |
3 |
|
$ |
— |
|
$ |
— |
|
$ |
11 |
|
$ |
5 |
|
$ |
11 |
|
After-tax |
|
$ |
— |
|
$ |
— |
|
$ |
3 |
|
$ |
2 |
|
$ |
— |
|
$ |
— |
|
$ |
7 |
|
$ |
3 |
|
$ |
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Policies in force (in thousands) |
|
2,157 |
|
2,234 |
|
2,260 |
|
2,264 |
|
2,270 |
|
2,281 |
|
2,307 |
|
2,260 |
|
2,307 |
|
|||||||||
Change from prior year quarter |
|
8.1 |
% |
10.8 |
% |
10.5 |
% |
9.4 |
% |
5.2 |
% |
2.1 |
% |
2.1 |
% |
|
|
|
|
|||||||||
Change from prior quarter |
|
4.3 |
% |
3.6 |
% |
1.2 |
% |
0.2 |
% |
0.3 |
% |
0.5 |
% |
1.1 |
% |
|
|
|
|
(1) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. Billing and policy fees are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Billing and policy fees |
|
$ |
14 |
|
$ |
14 |
|
$ |
15 |
|
$ |
14 |
|
$ |
15 |
|
$ |
14 |
|
$ |
15 |
|
$ |
43 |
|
$ |
44 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
21
The St. Paul Travelers Companies, Inc.
Selected Statistics - Personal (Homeowners and Other)
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Statutory underwriting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross written premiums |
|
$ |
545 |
|
$ |
700 |
|
$ |
738 |
|
$ |
658 |
|
$ |
608 |
|
$ |
782 |
|
$ |
822 |
|
$ |
1,983 |
|
$ |
2,212 |
|
Net written premiums |
|
$ |
519 |
|
$ |
666 |
|
$ |
688 |
|
$ |
623 |
|
$ |
580 |
|
$ |
746 |
|
$ |
730 |
|
$ |
1,873 |
|
$ |
2,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earned premiums |
|
$ |
515 |
|
$ |
543 |
|
$ |
588 |
|
$ |
614 |
|
$ |
619 |
|
$ |
645 |
|
$ |
647 |
|
$ |
1,646 |
|
$ |
1,911 |
|
Losses and loss adjustment expenses |
|
202 |
|
233 |
|
386 |
|
176 |
|
260 |
|
287 |
|
750 |
|
821 |
|
1,297 |
|
|||||||||
Underwriting expenses |
|
147 |
|
192 |
|
198 |
|
190 |
|
189 |
|
221 |
|
228 |
|
537 |
|
638 |
|
|||||||||
Statutory underwriting gain (loss) |
|
$ |
166 |
|
$ |
118 |
|
$ |
4 |
|
$ |
248 |
|
$ |
170 |
|
$ |
137 |
|
$ |
(331 |
) |
$ |
288 |
|
$ |
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
GAAP Combined ratio (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss and loss adjustment expense ratio |
|
39.2 |
% |
42.9 |
% |
65.7 |
% |
28.6 |
% |
42.0 |
% |
44.5 |
% |
115.8 |
% |
49.9 |
% |
67.9 |
% |
|||||||||
Underwriting expense ratio |
|
26.6 |
% |
28.2 |
% |
27.7 |
% |
29.0 |
% |
30.1 |
% |
29.2 |
% |
30.8 |
% |
27.6 |
% |
30.0 |
% |
|||||||||
Combined ratio |
|
65.8 |
% |
71.1 |
% |
93.4 |
% |
57.6 |
% |
72.1 |
% |
73.7 |
% |
146.6 |
% |
77.5 |
% |
97.9 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Impact of catastrophes on combined ratio |
|
3.9 |
% |
4.4 |
% |
23.3 |
% |
0.0 |
% |
1.9 |
% |
1.7 |
% |
73.8 |
% |
11.0 |
% |
26.2 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Catastrophe losses, net of reinsurance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Pre-tax |
|
$ |
20 |
|
$ |
24 |
|
$ |
137 |
|
$ |
— |
|
$ |
12 |
|
$ |
11 |
|
$ |
477 |
|
$ |
181 |
|
$ |
500 |
|
After-tax |
|
$ |
13 |
|
$ |
16 |
|
$ |
89 |
|
$ |
— |
|
$ |
7 |
|
$ |
8 |
|
$ |
310 |
|
$ |
118 |
|
$ |
325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Policies in force (in thousands) |
|
3,617 |
|
3,776 |
|
3,916 |
|
4,011 |
|
4,038 |
|
4,090 |
|
4,150 |
|
3,916 |
|
4,150 |
|
|||||||||
Change from prior year quarter |
|
9.4 |
% |
12.3 |
% |
14.2 |
% |
14.9 |
% |
11.6 |
% |
8.3 |
% |
6.0 |
% |
|
|
|
|
|||||||||
Change from prior quarter |
|
3.6 |
% |
4.4 |
% |
3.7 |
% |
2.4 |
% |
0.7 |
% |
1.3 |
% |
1.5 |
% |
|
|
|
|
(1) Billing and policy fees, which are a component of other revenues, are allocated as a reduction of other underwriting expenses. Billing and policy fees are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Billing and policy fees |
|
$ |
7 |
|
$ |
8 |
|
$ |
8 |
|
$ |
8 |
|
$ |
8 |
|
$ |
9 |
|
$ |
8 |
|
$ |
23 |
|
$ |
25 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
22
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net investment income |
|
$ |
— |
|
$ |
1 |
|
$ |
2 |
|
$ |
3 |
|
$ |
6 |
|
$ |
(12 |
) |
$ |
13 |
|
$ |
3 |
|
$ |
7 |
|
Other revenues |
|
— |
|
2 |
|
4 |
|
2 |
|
(1 |
) |
(1 |
) |
— |
|
6 |
|
(2 |
) |
|||||||||
Total revenues |
|
— |
|
3 |
|
6 |
|
5 |
|
5 |
|
(13 |
) |
13 |
|
9 |
|
5 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Claims and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense |
|
35 |
|
62 |
|
66 |
|
70 |
|
71 |
|
69 |
|
70 |
|
163 |
|
210 |
|
|||||||||
General and administrative expenses |
|
3 |
|
28 |
|
11 |
|
10 |
|
7 |
|
— |
|
5 |
|
42 |
|
12 |
|
|||||||||
Total claims and expenses |
|
38 |
|
90 |
|
77 |
|
80 |
|
78 |
|
69 |
|
75 |
|
205 |
|
222 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating loss before federal income tax benefit |
|
(38 |
) |
(87 |
) |
(71 |
) |
(75 |
) |
(73 |
) |
(82 |
) |
(62 |
) |
(196 |
) |
(217 |
) |
|||||||||
Income taxes |
|
(13 |
) |
(26 |
) |
(25 |
) |
(24 |
) |
(26 |
) |
(31 |
) |
(21 |
) |
(64 |
) |
(78 |
) |
|||||||||
Minority Interest, net of tax |
|
— |
|
(1 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(1 |
) |
— |
|
|||||||||
Operating loss |
|
$ |
(25 |
) |
$ |
(60 |
) |
$ |
(46 |
) |
$ |
(51 |
) |
$ |
(47 |
) |
$ |
(51 |
) |
$ |
(41 |
) |
$ |
(131 |
) |
$ |
(139 |
) |
See Glossary of Financial Measures and Description of Operating Segments on page 36.
23
The St. Paul Travelers Companies, Inc.
Consolidated Balance Sheet (1)
($ in millions)
|
|
September 30, |
|
December 31, |
|
||
|
|
2005 (1) |
|
2004 |
|
||
|
|
|
|
|
|
||
Assets |
|
|
|
|
|
||
Fixed maturities, available for sale at fair value (including $2,536 and $2,603 subject to securities lending and repurchase agreements) (amortized cost $57,707 and $53,017) |
|
$ |
58,294 |
|
$ |
54,269 |
|
Equity securities, at fair value (cost $620 and $687) |
|
675 |
|
759 |
|
||
Real estate |
|
738 |
|
773 |
|
||
Mortgage loans |
|
147 |
|
191 |
|
||
Short-term securities |
|
5,975 |
|
4,944 |
|
||
Other investments |
|
2,988 |
|
3,432 |
|
||
Total investments |
|
68,817 |
|
64,368 |
|
||
|
|
|
|
|
|
||
Cash |
|
442 |
|
262 |
|
||
Investment income accrued |
|
743 |
|
671 |
|
||
Premiums receivable |
|
6,149 |
|
6,201 |
|
||
Reinsurance recoverables |
|
19,452 |
|
19,054 |
|
||
Ceded unearned premiums |
|
1,561 |
|
1,565 |
|
||
Deferred acquisition costs |
|
1,558 |
|
1,559 |
|
||
Deferred tax asset |
|
1,985 |
|
2,198 |
|
||
Contractholder receivables |
|
5,658 |
|
5,629 |
|
||
Goodwill |
|
3,452 |
|
3,564 |
|
||
Intangible assets |
|
957 |
|
1,062 |
|
||
Net assets of discontinued operations (2) |
|
— |
|
2,041 |
|
||
Other assets |
|
2,668 |
|
3,072 |
|
||
Total assets |
|
$ |
113,442 |
|
$ |
111,246 |
|
|
|
September 30, |
|
December 31, |
|
||
|
|
2005 (1) |
|
2004 |
|
||
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
||
Claims and claim adjustment expense reserves |
|
$ |
60,586 |
|
$ |
59,070 |
|
Unearned premium reserves |
|
11,164 |
|
11,310 |
|
||
Contractholder payables |
|
5,658 |
|
5,629 |
|
||
Payables for reinsurance premiums |
|
908 |
|
896 |
|
||
Debt |
|
5,753 |
|
6,313 |
|
||
Other liabilities |
|
6,965 |
|
6,827 |
|
||
Total liabilities |
|
91,034 |
|
90,045 |
|
||
|
|
|
|
|
|
||
Shareholders’ equity |
|
|
|
|
|
||
Preferred stock: |
|
|
|
|
|
||
Stock Ownership Plan - convertible preferred stock (0.5 and 0.6 shares issued and outstanding) |
|
160 |
|
193 |
|
||
Guaranteed obligation - Stock Ownership Plan |
|
— |
|
(5 |
) |
||
Common stock (1,750.0 shares authorized; 693.2 and 670.7 shares issued; 692.2 and 670.3 shares outstanding) |
|
18,119 |
|
17,414 |
|
||
Retained earnings |
|
3,733 |
|
2,744 |
|
||
Accumulated other changes in equity from nonowner sources |
|
538 |
|
952 |
|
||
Treasury stock, at cost (1.0 and 0.4 shares) |
|
(41 |
) |
(14 |
) |
||
Unearned compensation |
|
(101 |
) |
(83 |
) |
||
Total shareholders’ equity |
|
22,408 |
|
21,201 |
|
||
Total liabilities and shareholders’ equity |
|
$ |
113,442 |
|
$ |
111,246 |
|
(1) Preliminary.
(2) As a result of a decrease in the Company’s ownership interest in Nuveen, the Company began applying the equity method of accounting for its investment in Nuveen in 2Q 2005. Accordingly, the assets and liabilities of Nuveen were reclassified to net assets of discontinued operations. The Company divested its remaining ownership interest in Nuveen in 3Q 2005.
24
The St. Paul Travelers Companies, Inc.
(at carrying value, $ in millions)
|
|
September 30, |
|
Pre-tax Book |
|
December 31, |
|
Pre-tax Book |
|
||
|
|
2005 |
|
Yield |
|
2004 |
|
Yield |
|
||
Investment portfolio |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
||
Taxable fixed maturities (including redeemable preferred stock) |
|
$ |
27,817 |
|
4.77 |
% |
$ |
27,686 |
|
4.78 |
% |
Tax-exempt fixed maturities |
|
30,477 |
|
4.14 |
% |
26,583 |
|
4.14 |
% |
||
Total fixed maturities |
|
58,294 |
|
4.45 |
% |
54,269 |
|
4.47 |
% |
||
|
|
|
|
|
|
|
|
|
|
||
Non-redeemable preferred stocks |
|
507 |
|
6.46 |
% |
581 |
|
6.71 |
% |
||
Common stocks |
|
168 |
|
N/A |
|
178 |
|
N/A |
|
||
Total equity securities |
|
675 |
|
N/A |
|
759 |
|
N/A |
|
||
|
|
|
|
|
|
|
|
|
|
||
Mortgage loans |
|
147 |
|
5.87 |
% |
191 |
|
8.25 |
% |
||
|
|
|
|
|
|
|
|
|
|
||
Real estate |
|
738 |
|
N/A |
|
773 |
|
N/A |
|
||
|
|
|
|
|
|
|
|
|
|
||
Short-term securities |
|
5,975 |
|
3.75 |
% |
4,944 |
|
2.23 |
% |
||
|
|
|
|
|
|
|
|
|
|
||
Private equities |
|
1,474 |
|
N/A |
|
1,707 |
|
N/A |
|
||
Arbitrage funds |
|
758 |
|
N/A |
|
944 |
|
N/A |
|
||
Real estate joint ventures & other |
|
725 |
|
N/A |
|
743 |
|
N/A |
|
||
Trading securities |
|
31 |
|
N/A |
|
38 |
|
N/A |
|
||
Total other investments |
|
2,988 |
|
N/A |
|
3,432 |
|
N/A |
|
||
|
|
|
|
|
|
|
|
|
|
||
Total investments |
|
$ |
68,817 |
|
4.40 |
% |
$ |
64,368 |
|
4.31 |
% |
|
|
|
|
|
|
|
|
|
|
||
Net unrealized gain on investment securities, net of tax, included in shareholders’ equity |
|
$ |
472 |
|
|
|
$ |
866 |
|
|
|
25
The St. Paul Travelers Companies, Inc.
Investment Portfolio - Fixed Maturities Data
(at carrying value, $ in millions)
|
|
September 30, |
|
December 31, |
|
||
|
|
2005 |
|
2004 |
|
||
Fixed maturities |
|
|
|
|
|
||
Mortgage-backed securities - principally obligations of U.S. Government agencies |
|
$ |
7,495 |
|
$ |
8,678 |
|
U.S. Treasury securities and obligations of U.S. Government corporations and agencies |
|
3,632 |
|
3,033 |
|
||
Corporates (including redeemable preferreds) |
|
14,573 |
|
13,856 |
|
||
Obligations of states and political subdivisions |
|
30,882 |
|
26,841 |
|
||
Debt securities issued by foreign governments |
|
1,712 |
|
1,861 |
|
||
Subtotal - Available-for-sale securities |
|
58,294 |
|
54,269 |
|
||
Trading securities |
|
5 |
|
15 |
|
||
Total fixed maturities |
|
$ |
58,299 |
|
$ |
54,284 |
|
|
|
|
|
|
|
||
Fixed
Maturities |
|
|
|
|
|
||
|
|
|
|
|
|
||
|
|
September 30, 2005 |
|
||||
|
|
Amount |
|
% of Total |
|
||
Quality Ratings |
|
|
|
|
|
||
Aaa |
|
$ |
37,393 |
|
64.1 |
% |
|
Aa |
|
11,084 |
|
19.0 |
|
||
A |
|
4,578 |
|
7.9 |
|
||
Baa |
|
3,401 |
|
5.8 |
|
||
Total investment grade |
|
56,456 |
|
96.8 |
|
||
Ba |
|
864 |
|
1.5 |
|
||
B |
|
625 |
|
1.1 |
|
||
Caa and lower |
|
349 |
|
0.6 |
|
||
Total below investment grade |
|
1,838 |
|
3.2 |
|
||
Total fixed maturities, excluding trading securities |
|
$ |
58,294 |
|
100.0 |
% |
|
Trading securities |
|
$ |
5 |
|
|
|
|
Average weighted quality |
|
AA1, AA+ |
|
|
|
||
Average duration of fixed maturities and short-term securities, net of securities lending activities and net receivables and payables on investment sales and purchases |
|
3.9 |
|
|
|
(1) Rated using external rating agencies or by St. Paul Travelers when a public rating does not exist. Below investment grade assets refer to securities rated “Ba” or below.
26
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities |
|
$ |
412 |
|
$ |
555 |
|
$ |
583 |
|
$ |
579 |
|
$ |
609 |
|
$ |
615 |
|
$ |
636 |
|
$ |
1,550 |
|
$ |
1,860 |
|
Short-term securities |
|
9 |
|
12 |
|
21 |
|
27 |
|
30 |
|
37 |
|
56 |
|
42 |
|
123 |
|
|||||||||
Mortgage loans |
|
4 |
|
14 |
|
4 |
|
3 |
|
4 |
|
4 |
|
14 |
|
22 |
|
22 |
|
|||||||||
Other (1) |
|
249 |
|
67 |
|
69 |
|
161 |
|
139 |
|
145 |
|
125 |
|
385 |
|
409 |
|
|||||||||
|
|
674 |
|
648 |
|
677 |
|
770 |
|
782 |
|
801 |
|
831 |
|
1,999 |
|
2,414 |
|
|||||||||
Investment expenses (1) |
|
55 |
|
6 |
|
10 |
|
35 |
|
17 |
|
26 |
|
19 |
|
71 |
|
62 |
|
|||||||||
Net investment income, pre-tax |
|
619 |
|
642 |
|
667 |
|
735 |
|
765 |
|
775 |
|
812 |
|
1,928 |
|
2,352 |
|
|||||||||
Income taxes |
|
165 |
|
152 |
|
153 |
|
173 |
|
182 |
|
177 |
|
187 |
|
470 |
|
546 |
|
|||||||||
Net investment income, after-tax |
|
$ |
454 |
|
$ |
490 |
|
$ |
514 |
|
$ |
562 |
|
$ |
583 |
|
$ |
598 |
|
$ |
625 |
|
$ |
1,458 |
|
$ |
1,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effective tax rate |
|
26.6 |
% |
23.7 |
% |
23.0 |
% |
23.4 |
% |
23.9 |
% |
22.8 |
% |
23.0 |
% |
24.4 |
% |
23.2 |
% |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Average invested assets (2) |
|
$ |
37,097 |
|
$ |
59,292 |
|
$ |
61,274 |
|
$ |
62,892 |
|
$ |
64,218 |
|
$ |
65,765 |
|
$ |
67,630 |
|
$ |
52,711 |
|
$ |
65,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Average yield pre-tax |
|
6.7 |
% |
4.3 |
% |
4.4 |
% |
4.7 |
% |
4.8 |
% |
4.7 |
% |
4.8 |
% |
4.9 |
% |
4.8 |
% |
|||||||||
Average yield after-tax |
|
4.9 |
% |
3.3 |
% |
3.4 |
% |
3.6 |
% |
3.6 |
% |
3.6 |
% |
3.7 |
% |
3.7 |
% |
3.7 |
% |
(1) Includes $166 million and $39 million of gross investment income and investment expenses, respectively, in 1Q 2004 resulting from the impact of an initial public offering of a private equity investment. Commercial, Specialty and Personal include $82 million, $3 million and $42 million of pre-tax net investment income ($54 million, $2 million and $27 million after-tax), respectively, related to this private equity investment.
(2) Reduced by payables for securities lending and repurchase agreements and excludes net unrealized investment gains and losses, receivables for investment sales, and payables on investment purchases.
27
The St. Paul Travelers Companies, Inc.
Net Realized and Unrealized Investment Gains (Losses)
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net realized investment gains (losses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities |
|
$ |
12 |
|
$ |
38 |
|
$ |
11 |
|
$ |
2 |
|
$ |
4 |
|
$ |
(41 |
) |
$ |
(4 |
) |
$ |
61 |
|
$ |
(41 |
) |
Equity securities |
|
1 |
|
1 |
|
8 |
|
14 |
|
4 |
|
4 |
|
14 |
|
10 |
|
22 |
|
|||||||||
Other |
|
(55 |
) |
16 |
|
(68 |
) |
(19 |
) |
(8 |
) |
(18 |
) |
29 |
|
(107 |
) |
3 |
|
|||||||||
Realized investment gains (losses) before tax |
|
(42 |
) |
55 |
|
(49 |
) |
(3 |
) |
— |
|
(55 |
) |
39 |
|
(36 |
) |
(16 |
) |
|||||||||
Related taxes |
|
(15 |
) |
20 |
|
(17 |
) |
1 |
|
(18 |
) |
(20 |
) |
14 |
|
(12 |
) |
(24 |
) |
|||||||||
Net realized investment gains (losses) |
|
$ |
(27 |
) |
$ |
35 |
|
$ |
(32 |
) |
$ |
(4 |
) |
$ |
18 |
|
$ |
(35 |
) |
$ |
25 |
|
$ |
(24 |
) |
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Gross investment gains (1) |
|
$ |
135 |
|
$ |
371 |
|
$ |
185 |
|
$ |
326 |
|
$ |
203 |
|
$ |
212 |
|
$ |
196 |
|
$ |
691 |
|
$ |
611 |
|
Gross investment losses before impairments (1) |
|
(166 |
) |
(293 |
) |
(206 |
) |
(311 |
) |
(194 |
) |
(225 |
) |
(123 |
) |
(665 |
) |
(542 |
) |
|||||||||
Impairments |
|
(11 |
) |
(23 |
) |
(28 |
) |
(18 |
) |
(9 |
) |
(42 |
) |
(34 |
) |
(62 |
) |
(85 |
) |
|||||||||
Realized investment gains (losses) before tax |
|
(42 |
) |
55 |
|
(49 |
) |
(3 |
) |
— |
|
(55 |
) |
39 |
|
(36 |
) |
(16 |
) |
|||||||||
Related taxes |
|
(15 |
) |
20 |
|
(17 |
) |
1 |
|
(18 |
) |
(20 |
) |
14 |
|
(12 |
) |
(24 |
) |
|||||||||
Net realized investment gains (losses) |
|
$ |
(27 |
) |
$ |
35 |
|
$ |
(32 |
) |
$ |
(4 |
) |
$ |
18 |
|
$ |
(35 |
) |
$ |
25 |
|
$ |
(24 |
) |
$ |
8 |
|
|
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
|
March 31, |
|
June 30, |
|
September 30, |
|
|||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net unrealized investment gains (losses), by asset type |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fixed maturities |
|
$ |
1,805 |
|
$ |
154 |
|
$ |
1,268 |
|
$ |
1,252 |
|
$ |
429 |
|
$ |
1,420 |
|
$ |
587 |
|
Equity securities & other |
|
75 |
|
71 |
|
57 |
|
83 |
|
21 |
|
65 |
|
117 |
|
|||||||
Unrealized investment gains before tax and minority interest |
|
1,880 |
|
225 |
|
1,325 |
|
1,335 |
|
450 |
|
1,485 |
|
704 |
|
|||||||
Related taxes |
|
658 |
|
84 |
|
466 |
|
469 |
|
173 |
|
523 |
|
232 |
|
|||||||
Minority interest, net of tax |
|
(1 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance, end of period |
|
$ |
1,223 |
|
$ |
141 |
|
$ |
859 |
|
$ |
866 |
|
$ |
277 |
|
$ |
962 |
|
$ |
472 |
|
(1) Includes the following gross investment gains and gross investment losses related to U.S. Treasury futures, which are settled daily:
Gross investment Treasury future gains |
|
$ |
105 |
|
$ |
161 |
|
$ |
78 |
|
$ |
86 |
|
$ |
85 |
|
$ |
78 |
|
$ |
114 |
|
$ |
344 |
|
$ |
277 |
|
Gross investment Treasury future losses |
|
$ |
160 |
|
$ |
104 |
|
$ |
124 |
|
$ |
85 |
|
$ |
66 |
|
$ |
123 |
|
$ |
81 |
|
$ |
388 |
|
$ |
270 |
|
The Company entered into these arrangements as part of its strategy to shorten the duration of the fixed maturity portfolio. In a changing interest rate environment the change in the value of the futures contracts can be expected to partially offset changes in
the value of the fixed maturity portfolio.
28
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
September 30, |
|
December 31, |
|
||
|
|
2005 |
|
2004 |
|
||
Gross reinsurance recoverables on paid and unpaid claims and claim adjustment expenses |
|
$ |
14,308 |
|
$ |
13,367 |
|
Allowance for uncollectible reinsurance |
|
(796 |
) |
(751 |
) |
||
Net reinsurance recoverables |
|
13,512 |
|
12,616 |
|
||
Mandatory pools and associations |
|
2,047 |
|
2,497 |
|
||
Structured settlements |
|
3,893 |
|
3,941 |
|
||
Total reinsurance recoverables |
|
$ |
19,452 |
|
$ |
19,054 |
|
The Company’s top five reinsurers, including retroactive reinsurance, by reinsurance recoverable at December 31, 2004 is as follows:
|
|
December 31, |
|
|
|
|
Reinsurer |
|
2004 |
|
A.M. Best Rating of Reinsurer |
|
|
American Re-Insurance Company |
|
$ |
1,198 |
|
A third highest of 16 ratings |
|
General Reinsurance Corporation |
|
826 |
|
A++ highest of 16 ratings |
|
|
XL Reinsurance America Inc. |
|
613 |
|
A+ second highest of 16 ratings |
|
|
Transatlantic Reinsurance Company |
|
604 |
|
A+ second highest of 16 ratings |
|
|
Swiss Reinsurance America Corporation |
|
493 |
|
A+ second highest of 16 ratings |
|
|
The gross reinsurance recoverable on paid and unpaid claims and claim adjustment expenses represent the current and estimated future amounts due from reinsurers on known and unasserted claims. The ceded reserves are estimated in a manner consistent with the underlying direct and assumed reserves. Although this total comprises recoverables due from nearly one thousand different reinsurance entities, about half is attributable to 10 reinsurer groups.
The allowance for uncollectible reinsurance is based upon the Company’s ongoing review of amounts outstanding, length of collection periods, changes in reinsurer credit standing, and other relevant factors.
The mandatory pools and associations represent various involuntary assigned risk pools that the Company is required to participate in. These pools principally involve workers’ compensation and automobile insurance, which provide various insurance coverages to insureds that otherwise are unable to purchase coverage in the open market. The costs of these mandatory pools in most states are usually charged back to the participating members in proportion to voluntary writings of related business in that state. In the event that a member of the pool becomes insolvent, the remaining members assume an additional pro rata share of the pool’s liabilities.
The structured settlements represent annuities that are purchased from life insurance companies to settle personal physical injury claims, with workers’ compensation claims comprising a significant proportion. The Company retains the ultimate liability to the claimant in the event that the assigned company fails to pay, so the amount is reflected as a liability and as a recoverable
for GAAP purposes.
29
The St. Paul Travelers Companies, Inc.
Net Reserves for Losses and Loss Adjustment Expense
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning of period |
|
$ |
18,791 |
|
$ |
18,847 |
|
$ |
27,981 |
|
$ |
28,408 |
|
$ |
29,021 |
|
$ |
28,772 |
|
$ |
28,352 |
|
$ |
18,791 |
|
$ |
29,021 |
|
Incurred |
|
1,126 |
|
1,735 |
|
1,924 |
|
2,479 |
|
1,426 |
|
1,332 |
|
2,065 |
|
4,785 |
|
4,823 |
|
|||||||||
Paid |
|
(1,070 |
) |
(1,430 |
) |
(1,498 |
) |
(1,931 |
) |
(1,705 |
) |
(1,725 |
) |
(1,484 |
) |
(3,998 |
) |
(4,914 |
) |
|||||||||
Acquired reserves, foreign exchange and other (1) |
|
— |
|
8,829 |
|
1 |
|
65 |
|
30 |
|
(27 |
) |
(22 |
) |
8,830 |
|
(19 |
) |
|||||||||
End of period |
|
$ |
18,847 |
|
$ |
27,981 |
|
$ |
28,408 |
|
$ |
29,021 |
|
$ |
28,772 |
|
$ |
28,352 |
|
$ |
28,911 |
|
$ |
28,408 |
|
$ |
28,911 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Specialty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning of period |
|
$ |
2,020 |
|
$ |
2,204 |
|
$ |
8,723 |
|
$ |
9,129 |
|
$ |
9,373 |
|
$ |
9,582 |
|
$ |
9,686 |
|
$ |
2,020 |
|
$ |
9,373 |
|
Incurred |
|
304 |
|
2,254 |
|
1,113 |
|
1,016 |
|
936 |
|
872 |
|
994 |
|
3,671 |
|
2,802 |
|
|||||||||
Paid |
|
(120 |
) |
(564 |
) |
(644 |
) |
(894 |
) |
(694 |
) |
(710 |
) |
(642 |
) |
(1,328 |
) |
(2,046 |
) |
|||||||||
Acquired reserves, foreign exchange and other (1) |
|
— |
|
4,829 |
|
(63 |
) |
122 |
|
(33 |
) |
(58 |
) |
31 |
|
4,766 |
|
(60 |
) |
|||||||||
End of period |
|
$ |
2,204 |
|
$ |
8,723 |
|
$ |
9,129 |
|
$ |
9,373 |
|
$ |
9,582 |
|
$ |
9,686 |
|
$ |
10,069 |
|
$ |
9,129 |
|
$ |
10,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning of period |
|
$ |
3,218 |
|
$ |
3,233 |
|
$ |
3,335 |
|
$ |
3,553 |
|
$ |
3,334 |
|
$ |
3,283 |
|
$ |
3,319 |
|
$ |
3,218 |
|
$ |
3,334 |
|
Incurred |
|
779 |
|
829 |
|
1,003 |
|
644 |
|
765 |
|
829 |
|
1,275 |
|
2,611 |
|
2,869 |
|
|||||||||
Paid |
|
(764 |
) |
(752 |
) |
(785 |
) |
(863 |
) |
(816 |
) |
(793 |
) |
(841 |
) |
(2,301 |
) |
(2,450 |
) |
|||||||||
Acquired reserves, foreign exchange and other (1) |
|
— |
|
25 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
25 |
|
— |
|
|||||||||
End of period |
|
$ |
3,233 |
|
$ |
3,335 |
|
$ |
3,553 |
|
$ |
3,334 |
|
$ |
3,283 |
|
$ |
3,319 |
|
$ |
3,753 |
|
$ |
3,553 |
|
$ |
3,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning of period |
|
$ |
24,029 |
|
$ |
24,284 |
|
$ |
40,039 |
|
$ |
41,090 |
|
$ |
41,728 |
|
$ |
41,637 |
|
$ |
41,357 |
|
$ |
24,029 |
|
$ |
41,728 |
|
Incurred |
|
2,209 |
|
4,818 |
|
4,040 |
|
4,139 |
|
3,127 |
|
3,033 |
|
4,334 |
|
11,067 |
|
10,494 |
|
|||||||||
Paid |
|
(1,954 |
) |
(2,746 |
) |
(2,927 |
) |
(3,688 |
) |
(3,215 |
) |
(3,228 |
) |
(2,967 |
) |
(7,627 |
) |
(9,410 |
) |
|||||||||
Acquired reserves, foreign exchange and other (1) |
|
— |
|
13,683 |
|
(62 |
) |
187 |
|
(3 |
) |
(85 |
) |
9 |
|
13,621 |
|
(79 |
) |
|||||||||
End of period |
|
$ |
24,284 |
|
$ |
40,039 |
|
$ |
41,090 |
|
$ |
41,728 |
|
$ |
41,637 |
|
$ |
41,357 |
|
$ |
42,733 |
|
$ |
41,090 |
|
$ |
42,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Prior Year Reserve Development: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asbestos |
|
$ |
— |
|
$ |
5 |
|
$ |
— |
|
$ |
922 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
5 |
|
$ |
— |
|
Environmental |
|
— |
|
197 |
|
5 |
|
84 |
|
— |
|
— |
|
— |
|
202 |
|
— |
|
|||||||||
All other |
|
(6 |
) |
11 |
|
112 |
|
13 |
|
6 |
|
(10 |
) |
(6 |
) |
117 |
|
(10 |
) |
|||||||||
Accretion of discount |
|
16 |
|
17 |
|
15 |
|
25 |
|
13 |
|
14 |
|
13 |
|
48 |
|
40 |
|
|||||||||
Total Commercial |
|
10 |
|
230 |
|
132 |
|
1,044 |
|
19 |
|
4 |
|
7 |
|
372 |
|
30 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Specialty |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asbestos |
|
— |
|
— |
|
1 |
|
— |
|
— |
|
— |
|
— |
|
1 |
|
— |
|
|||||||||
Environmental |
|
— |
|
7 |
|
(3 |
) |
— |
|
— |
|
— |
|
— |
|
4 |
|
— |
|
|||||||||
All other |
|
150 |
|
1,277 |
|
5 |
|
(11 |
) |
53 |
|
16 |
|
(13 |
) |
1,432 |
|
56 |
|
|||||||||
Accretion of discount |
|
— |
|
1 |
|
1 |
|
— |
|
2 |
|
— |
|
1 |
|
2 |
|
3 |
|
|||||||||
Total Specialty |
|
150 |
|
1,285 |
|
4 |
|
(11 |
) |
55 |
|
16 |
|
(12 |
) |
1,439 |
|
59 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Personal |
|
(101 |
) |
(100 |
) |
(37 |
) |
(140 |
) |
(114 |
) |
(81 |
) |
(83 |
) |
(238 |
) |
(278 |
) |
|||||||||
Total (2) |
|
$ |
59 |
|
$ |
1,415 |
|
$ |
99 |
|
$ |
893 |
|
$ |
(40 |
) |
$ |
(61 |
) |
$ |
(88 |
) |
$ |
1,573 |
|
$ |
(189 |
) |
(1) All St Paul 1Q 2004 ending reserve balances are shown as acquired reserves during 2Q 2004.
(2) Prior year reserve development within incurred losses does not include the benefit (detriment) of retroactive reinsurance which totals $(15) million and $5 million for 2Q 2004 and 3Q 2004 respectively.
See Glossary of Financial Measures and Description of Operating Segments on page 36.
30
The St. Paul Travelers Companies, Inc.
Asbestos and Environmental Reserves
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Asbestos reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
$ |
3,782 |
|
$ |
3,688 |
|
$ |
4,052 |
|
$ |
3,976 |
|
$ |
4,775 |
|
$ |
4,675 |
|
$ |
4,527 |
|
$ |
3,782 |
|
$ |
4,775 |
|
Ceded |
|
(805 |
) |
(799 |
) |
(999 |
) |
(868 |
) |
(843 |
) |
(818 |
) |
(785 |
) |
(805 |
) |
(843 |
) |
|||||||||
Net |
|
2,977 |
|
2,889 |
|
3,053 |
|
3,108 |
|
3,932 |
|
3,857 |
|
3,742 |
|
2,977 |
|
3,932 |
|
|||||||||
Acquired reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
— |
|
502 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
502 |
|
— |
|
|||||||||
Ceded |
|
— |
|
(191 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(191 |
) |
— |
|
|||||||||
Incurred losses and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
— |
|
7 |
|
2 |
|
932 |
|
— |
|
— |
|
— |
|
9 |
|
— |
|
|||||||||
Ceded |
|
— |
|
(2 |
) |
(1 |
) |
(10 |
) |
— |
|
— |
|
— |
|
(3 |
) |
— |
|
|||||||||
Accretion of discount: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
5 |
|
5 |
|
3 |
|
4 |
|
— |
|
1 |
|
— |
|
13 |
|
1 |
|
|||||||||
Ceded |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|||||||||
Losses paid: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
99 |
|
150 |
|
81 |
|
137 |
|
100 |
|
149 |
|
115 |
|
330 |
|
364 |
|
|||||||||
Ceded |
|
(6 |
) |
7 |
|
(132 |
) |
(35 |
) |
(25 |
) |
(33 |
) |
(42 |
) |
(131 |
) |
(100 |
) |
|||||||||
Ending reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
3,688 |
|
4,052 |
|
3,976 |
|
4,775 |
|
4,675 |
|
4,527 |
|
4,412 |
|
3,976 |
|
4,412 |
|
|||||||||
Ceded |
|
(799 |
) |
(999 |
) |
(868 |
) |
(843 |
) |
(818 |
) |
(785 |
) |
(743 |
) |
(868 |
) |
(743 |
) |
|||||||||
Net |
|
$ |
2,889 |
|
$ |
3,053 |
|
$ |
3,108 |
|
$ |
3,932 |
|
$ |
3,857 |
|
$ |
3,742 |
|
$ |
3,669 |
|
$ |
3,108 |
|
$ |
3,669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Environmental reserves |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Beginning reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
$ |
331 |
|
$ |
287 |
|
$ |
764 |
|
$ |
701 |
|
$ |
725 |
|
$ |
624 |
|
$ |
547 |
|
$ |
331 |
|
$ |
725 |
|
Ceded |
|
(41 |
) |
(39 |
) |
(108 |
) |
(98 |
) |
(84 |
) |
(85 |
) |
(79 |
) |
(41 |
) |
(84 |
) |
|||||||||
Net |
|
290 |
|
248 |
|
656 |
|
603 |
|
641 |
|
539 |
|
468 |
|
290 |
|
641 |
|
|||||||||
Acquired reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
— |
|
271 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
271 |
|
— |
|
|||||||||
Ceded |
|
— |
|
(58 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(58 |
) |
— |
|
|||||||||
Incurred losses and loss expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
— |
|
242 |
|
1 |
|
80 |
|
— |
|
— |
|
— |
|
243 |
|
— |
|
|||||||||
Ceded |
|
— |
|
(38 |
) |
1 |
|
4 |
|
— |
|
— |
|
— |
|
(37 |
) |
— |
|
|||||||||
Losses paid: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
44 |
|
36 |
|
64 |
|
56 |
|
101 |
|
77 |
|
30 |
|
144 |
|
208 |
|
|||||||||
Ceded |
|
(2 |
) |
(27 |
) |
(9 |
) |
(10 |
) |
1 |
|
(6 |
) |
1 |
|
(38 |
) |
(4 |
) |
|||||||||
Ending reserves: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Direct |
|
287 |
|
764 |
|
701 |
|
725 |
|
624 |
|
547 |
|
517 |
|
701 |
|
517 |
|
|||||||||
Ceded |
|
(39 |
) |
(108 |
) |
(98 |
) |
(84 |
) |
(85 |
) |
(79 |
) |
(80 |
) |
(98 |
) |
(80 |
) |
|||||||||
Net |
|
$ |
248 |
|
$ |
656 |
|
$ |
603 |
|
$ |
641 |
|
$ |
539 |
|
$ |
468 |
|
$ |
437 |
|
$ |
603 |
|
$ |
437 |
|
See Glossary of Financial Measures and Description of Operating Segments on page 36.
31
The St. Paul Travelers Companies, Inc.
($ in millions)
|
|
September 30, |
|
December 31, |
|
||
|
|
2005 |
|
2004 |
|
||
Debt |
|
|
|
|
|
||
|
|
|
|
|
|
||
Short-term debt |
|
|
|
|
|
||
Commercial paper |
|
$ |
397 |
|
$ |
499 |
|
7.875% Senior notes due April 15, 2005 |
|
— |
|
238 |
|
||
7.125% Senior notes due June 1, 2005 |
|
— |
|
79 |
|
||
Medium-term notes maturing in 2005 |
|
— |
|
99 |
|
||
Total short-term debt |
|
397 |
|
915 |
|
||
|
|
|
|
|
|
||
Long-term debt |
|
|
|
|
|
||
Medium-term notes with various maturities from 2006 to 2010 |
|
298 |
|
298 |
|
||
6.75% Senior notes due November 15, 2006 |
|
150 |
|
150 |
|
||
5.75% Senior notes due March 15, 2007 |
|
500 |
|
500 |
|
||
5.25% Senior notes due August 16, 2007 (1) |
|
— |
|
442 |
|
||
5.01% Senior notes due August 16, 2007 (1) |
|
442 |
|
— |
|
||
3.75% Senior notes due March 15, 2008 |
|
400 |
|
400 |
|
||
4.50% Zero coupon convertible notes due 2009 |
|
121 |
|
117 |
|
||
8.125% Senior notes due April 15, 2010 |
|
250 |
|
250 |
|
||
7.81% Private placement notes due on various dates through 2011 |
|
16 |
|
20 |
|
||
5.00% Senior notes due March 15, 2013 |
|
500 |
|
500 |
|
||
7.75% Senior notes due April 15, 2026 |
|
200 |
|
200 |
|
||
7.625% Subordinated debentures due December 15, 2027 |
|
125 |
|
125 |
|
||
8.47% Subordinated debentures due January 10, 2027 |
|
81 |
|
81 |
|
||
4.50% Convertible junior subordinated notes due April 15, 2032 |
|
893 |
|
893 |
|
||
6.375% Senior notes due March 15, 2033 |
|
500 |
|
500 |
|
||
8.50% Subordinated debentures due December 15, 2045 |
|
56 |
|
56 |
|
||
8.312% Subordinated debentures due July 1, 2046 |
|
73 |
|
73 |
|
||
7.60% Subordinated debentures due October 15, 2050 |
|
593 |
|
593 |
|
||
Total long-term debt |
|
5,198 |
|
5,198 |
|
||
Unamortized fair value adjustment |
|
195 |
|
239 |
|
||
Unamortized debt issuance costs |
|
(37 |
) |
(39 |
) |
||
|
|
5,356 |
|
5,398 |
|
||
Total debt |
|
5,753 |
|
6,313 |
|
||
|
|
|
|
|
|
||
Minority interest |
|
2 |
|
20 |
|
||
|
|
|
|
|
|
||
Preferred equity |
|
160 |
|
188 |
|
||
|
|
|
|
|
|
||
Common equity (excluding SFAS 115) |
|
21,776 |
|
20,145 |
|
||
|
|
|
|
|
|
||
Total capital |
|
$ |
27,691 |
|
$ |
26,666 |
|
|
|
|
|
|
|
||
Total debt to capital |
|
20.8 |
% |
23.7 |
% |
(1) These senior notes bore an interest rate of 5.25% at December 31, 2004. The interest rate was reset to 5.01% in May 2005 pursuant to the remarketing of these notes.
32
The St. Paul Travelers Companies, Inc.
Statutory to GAAP Shareholders’ Equity Reconciliation
($ in millions)
|
|
September 30, |
|
December 31, |
|
||
|
|
2005 |
|
2004 |
|
||
|
|
|
|
|
|
||
Statutory capital and surplus |
|
$ |
17,738 |
|
$ |
15,112 |
|
|
|
|
|
|
|
||
GAAP adjustments |
|
|
|
|
|
||
|
|
|
|
|
|
||
Goodwill and intangible assets |
|
4,160 |
|
4,373 |
|
||
|
|
|
|
|
|
||
Investments |
|
1,342 |
|
2,129 |
|
||
|
|
|
|
|
|
||
Noninsurance companies |
|
(3,775 |
) |
(3,238 |
) |
||
|
|
|
|
|
|
||
Deferred acquisition costs |
|
1,558 |
|
1,557 |
|
||
|
|
|
|
|
|
||
Deferred federal income tax |
|
433 |
|
338 |
|
||
|
|
|
|
|
|
||
Reinsurance recoverables |
|
555 |
|
461 |
|
||
|
|
|
|
|
|
||
Furniture, equipment & software |
|
190 |
|
200 |
|
||
|
|
|
|
|
|
||
Employee benefits |
|
133 |
|
83 |
|
||
|
|
|
|
|
|
||
Agents balances |
|
108 |
|
139 |
|
||
|
|
|
|
|
|
||
Other |
|
(34 |
) |
47 |
|
||
|
|
|
|
|
|
||
Total GAAP adjustments |
|
4,670 |
|
6,089 |
|
||
|
|
|
|
|
|
||
GAAP shareholders’ equity |
|
$ |
22,408 |
|
$ |
21,201 |
|
33
The St. Paul Travelers Companies, Inc.
Statement of Cash Flows - Preliminary
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) |
|
$ |
587 |
|
$ |
(275 |
) |
$ |
340 |
|
$ |
303 |
|
$ |
212 |
|
$ |
1,069 |
|
$ |
162 |
|
$ |
652 |
|
$ |
1,443 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(Income) loss from discontinued operations, net of tax |
|
— |
|
(27 |
) |
(29 |
) |
(32 |
) |
665 |
|
(138 |
) |
(87 |
) |
(56 |
) |
440 |
|
|||||||||
Net realized investment (gains) losses |
|
42 |
|
(55 |
) |
49 |
|
3 |
|
— |
|
55 |
|
(39 |
) |
36 |
|
16 |
|
|||||||||
Depreciation and amortization |
|
25 |
|
71 |
|
252 |
|
174 |
|
150 |
|
236 |
|
113 |
|
348 |
|
499 |
|
|||||||||
Deferred federal income taxes (benefit) |
|
(17 |
) |
(98 |
) |
(63 |
) |
(100 |
) |
110 |
|
625 |
|
(218 |
) |
(178 |
) |
517 |
|
|||||||||
Amortization of deferred policy acquisition costs |
|
526 |
|
805 |
|
820 |
|
828 |
|
810 |
|
783 |
|
830 |
|
2,151 |
|
2,423 |
|
|||||||||
Premium balances receivable |
|
(12 |
) |
(90 |
) |
320 |
|
102 |
|
92 |
|
(187 |
) |
147 |
|
218 |
|
52 |
|
|||||||||
Reinsurance recoverables |
|
239 |
|
(24 |
) |
(126 |
) |
495 |
|
228 |
|
433 |
|
(1,059 |
) |
89 |
|
(398 |
) |
|||||||||
Deferred acquisition costs |
|
(549 |
) |
(819 |
) |
(810 |
) |
(770 |
) |
(808 |
) |
(793 |
) |
(821 |
) |
(2,178 |
) |
(2,422 |
) |
|||||||||
Claim and claim adjustment expense reserves |
|
96 |
|
2,140 |
|
1,081 |
|
156 |
|
(433 |
) |
(523 |
) |
2,484 |
|
3,317 |
|
1,528 |
|
|||||||||
Unearned premium reserves |
|
151 |
|
(4 |
) |
(84 |
) |
(105 |
) |
(148 |
) |
(41 |
) |
43 |
|
63 |
|
(146 |
) |
|||||||||
Trading account activities |
|
2 |
|
13 |
|
4 |
|
1 |
|
— |
|
6 |
|
— |
|
19 |
|
6 |
|
|||||||||
Other |
|
(309 |
) |
(218 |
) |
99 |
|
(42 |
) |
150 |
|
(822 |
) |
(174 |
) |
(428 |
) |
(846 |
) |
|||||||||
Net cash provided by operating activities |
|
781 |
|
1,419 |
|
1,853 |
|
1,013 |
|
1,028 |
|
703 |
|
1,381 |
|
4,053 |
|
3,112 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Proceeds from maturities of investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities |
|
865 |
|
1,822 |
|
1,332 |
|
1,602 |
|
1,073 |
|
1,348 |
|
1,393 |
|
4,019 |
|
3,814 |
|
|||||||||
Mortgage loans |
|
4 |
|
46 |
|
18 |
|
8 |
|
5 |
|
1 |
|
43 |
|
68 |
|
49 |
|
|||||||||
Proceeds from sales of investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities |
|
2,158 |
|
1,855 |
|
950 |
|
2,982 |
|
1,052 |
|
1,659 |
|
722 |
|
4,963 |
|
3,433 |
|
|||||||||
Equity securities |
|
68 |
|
39 |
|
46 |
|
112 |
|
39 |
|
73 |
|
169 |
|
153 |
|
281 |
|
|||||||||
Mortgage loans |
|
29 |
|
12 |
|
20 |
|
— |
|
— |
|
— |
|
— |
|
61 |
|
— |
|
|||||||||
Real estate |
|
— |
|
21 |
|
8 |
|
— |
|
— |
|
— |
|
39 |
|
29 |
|
39 |
|
|||||||||
Purchase of investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Fixed maturities |
|
(3,676 |
) |
(2,980 |
) |
(4,890 |
) |
(4,976 |
) |
(4,175 |
) |
(4,391 |
) |
(3,597 |
) |
(11,546 |
) |
(12,163 |
) |
|||||||||
Equity securities |
|
(28 |
) |
(20 |
) |
(11 |
) |
(35 |
) |
(21 |
) |
(1 |
) |
(15 |
) |
(59 |
) |
(37 |
) |
|||||||||
Mortgage loans |
|
(2 |
) |
(53 |
) |
— |
|
— |
|
— |
|
(9 |
) |
9 |
|
(55 |
) |
— |
|
|||||||||
Real estate |
|
— |
|
(10 |
) |
(22 |
) |
10 |
|
(8 |
) |
(14 |
) |
(7 |
) |
(32 |
) |
(29 |
) |
|||||||||
Short-term securities, (purchases) sales, net |
|
224 |
|
(1,476 |
) |
(159 |
) |
(502 |
) |
980 |
|
(855 |
) |
(1,155 |
) |
(1,411 |
) |
(1,030 |
) |
|||||||||
Other investments, net |
|
107 |
|
302 |
|
172 |
|
301 |
|
228 |
|
224 |
|
178 |
|
581 |
|
630 |
|
|||||||||
Securities transactions in course of settlement |
|
(681 |
) |
(563 |
) |
712 |
|
(576 |
) |
195 |
|
268 |
|
(260 |
) |
(532 |
) |
203 |
|
|||||||||
Net cash acquired in merger |
|
— |
|
151 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
151 |
|
— |
|
|||||||||
Other |
|
— |
|
11 |
|
40 |
|
(54 |
) |
— |
|
(48 |
) |
(25 |
) |
51 |
|
(73 |
) |
|||||||||
Net cash used by investing activities |
|
(932 |
) |
(843 |
) |
(1,784 |
) |
(1,128 |
) |
(632 |
) |
(1,745 |
) |
(2,506 |
) |
(3,559 |
) |
(4,883 |
) |
|||||||||
34
The St. Paul Travelers Companies, Inc.
Statement of Cash Flows - Preliminary (Continued)
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD |
|
YTD |
|
|||||||||
|
|
1Q |
|
2Q |
|
3Q |
|
4Q |
|
1Q |
|
2Q |
|
3Q |
|
3Q |
|
3Q |
|
|||||||||
|
|
2004 |
|
2004 |
|
2004 |
|
2004 |
|
2005 |
|
2005 |
|
2005 |
|
2004 |
|
2005 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Issuance of debt |
|
— |
|
— |
|
128 |
|
174 |
|
— |
|
— |
|
— |
|
128 |
|
— |
|
|||||||||
Payment of debt |
|
— |
|
(224 |
) |
(3 |
) |
— |
|
(2 |
) |
(479 |
) |
(41 |
) |
(227 |
) |
(522 |
) |
|||||||||
Treasury stock acquired - net employee stock-based compensation |
|
(9 |
) |
(11 |
) |
— |
|
(3 |
) |
(8 |
) |
(6 |
) |
(13 |
) |
(20 |
) |
(27 |
) |
|||||||||
Issuance of common stock - employee stock options |
|
29 |
|
39 |
|
12 |
|
31 |
|
32 |
|
29 |
|
68 |
|
80 |
|
129 |
|
|||||||||
Issuance of common stock - maturity of equity unit forward contracts |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
442 |
|
— |
|
442 |
|
|||||||||
Dividends to shareholders |
|
(81 |
) |
(263 |
) |
(149 |
) |
(149 |
) |
(150 |
) |
(157 |
) |
(160 |
) |
(493 |
) |
(467 |
) |
|||||||||
Repurchase of minority interest |
|
— |
|
(76 |
) |
— |
|
— |
|
— |
|
— |
|
— |
|
(76 |
) |
— |
|
|||||||||
Other |
|
— |
|
11 |
|
11 |
|
57 |
|
13 |
|
(13 |
) |
— |
|
22 |
|
— |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net cash provided (used) by financing activities |
|
(61 |
) |
(524 |
) |
(1 |
) |
110 |
|
(115 |
) |
(626 |
) |
296 |
|
(586 |
) |
(445 |
) |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Effect of exchange rate changes on cash |
|
— |
|
— |
|
(2 |
) |
9 |
|
(2 |
) |
(2 |
) |
1 |
|
(2 |
) |
(3 |
) |
|||||||||
Net proceeds from the sale of discontinued operations |
|
— |
|
— |
|
— |
|
— |
|
— |
|
1,867 |
|
532 |
|
— |
|
2,399 |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net increase (decrease) in cash |
|
(212 |
) |
52 |
|
66 |
|
4 |
|
279 |
|
197 |
|
(296 |
) |
(94 |
) |
180 |
|
|||||||||
Cash at beginning of period |
|
352 |
|
140 |
|
192 |
|
258 |
|
262 |
|
541 |
|
738 |
|
352 |
|
262 |
|
|||||||||
Cash at end of period |
|
$ |
140 |
|
$ |
192 |
|
$ |
258 |
|
$ |
262 |
|
$ |
541 |
|
$ |
738 |
|
$ |
442 |
|
$ |
258 |
|
$ |
442 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income taxes (received) paid |
|
$ |
108 |
|
$ |
438 |
|
$ |
— |
|
$ |
(18 |
) |
$ |
13 |
|
$ |
357 |
|
$ |
151 |
|
$ |
546 |
|
$ |
521 |
|
Interest paid |
|
$ |
47 |
|
$ |
72 |
|
$ |
83 |
|
$ |
79 |
|
$ |
87 |
|
$ |
86 |
|
$ |
88 |
|
$ |
202 |
|
$ |
261 |
|
35
The St. Paul Travelers Companies, Inc.
Financial Supplement - Third Quarter 2005
All historical information through the first quarter of 2004 included in this Financial Supplement presents only results of Travelers as Travelers is being treated as the accounting acquirer. Where applicable, historical results conform with current business segment definitions.
The following measures are used by the Company’s management to evaluate financial performance against historical results and establish targets on a consolidated basis. In some cases, these measures are considered non-GAAP financial measures under applicable SEC rules because they are not displayed as separate line items in the consolidated statement of income or required to be disclosed in the notes to financial statements, and in some cases, include or exclude certain items not ordinarily included or excluded in the most comparable GAAP financial measure. In the opinion of the Company’s management, a discussion of these measures provides investors with a better understanding of the significant factors that comprise the Company’s periodic results of operations and how management evaluates the Company’s financial performance.
Operating income (loss) is net income (loss) excluding the after-tax impact of net realized investment gains (losses) and discontinued operations. Operating income (loss) per share is operating income (loss) on a per share basis.
Return on equity is the ratio of net income to average equity. Continuing operations return on equity is the ratio of income from continuing operations to average equity. Operating return on equity is the ratio of operating income to average equity excluding net unrealized gains and losses on investment securities and discontinued operations, net of tax.
In the opinion of the Company’s management, operating income, operating income per share and operating return on equity are meaningful indicators of underwriting and operating results. These measures exclude net realized investment gains or losses which can be significantly impacted by both discretionary and other economic factors and are not necessarily indicative of operating trends. Internally, the Company’s management uses operating income, operating income per share and operating return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis.
Underwriting gain or loss is net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses.
A catastrophe is a severe loss, resulting from natural and manmade events, including risks such as fire, earthquake, windstorm, explosion, terrorism and other similar events. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or amount in advance, and therefore their effects are not included in earnings or claims and claim adjustment expense reserves prior to occurrence. A catastrophe may result in the payment of reinstatement premiums. In the opinion of the Company’s management, a discussion of the impact of catastrophes is meaningful for investors to understand the variability in periodic earnings.
Reinstatement premiums represent additional premiums payable to reinsurers to restore coverage limits for certain excess of loss reinsurance treaties.
Loss reserve development is the increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims. Loss reserve development may be related to prior year or current year development. In the opinion of the Company’s management, discussion of prior year loss reserve development is useful to investors as it allows them to assess the impact between prior year and current year development on current earnings and changes in claims and claim adjustment expense reserve levels from period to period.
GAAP combined ratio is the sum of the loss and loss adjustment expense ratio (loss and LAE ratio), the underwriting expense ratio and, where applicable, the ratio of dividends to policyholders to net premiums earned. For GAAP, the loss and LAE ratio is the ratio of incurred losses and loss adjustment expenses reduced by an allocation of fee income to net earned premiums. The underwriting expense ratio is the ratio of underwriting expenses incurred reduced by an allocation of fee income, billing and policy fees to net earned premium. A GAAP combined ratio under 100% generally indicates an underwriting profit. A GAAP combined ratio over 100% generally indicates an underwriting loss. The GAAP combined ratio is an operating statistic that includes GAAP measures in the numerator and the denominator.
Gross written premiums reflect the direct and assumed contractually determined amounts charged to the policyholders for the effective period of the contract based on the terms and conditions of the insurance contract. Gross written premiums are a measure of overall business volume.
Proforma combined gross and net written premiums reflect the addition of gross and net written premiums, respectively, of The St. Paul and Travelers for periods prior to the merger on April 1, 2004. The proforma combined gross and net written premium amounts are not affected by purchase accounting adjustments. Gross and net written premiums are a measure of business volume before and after reinsurance. The proforma information presented is not necessarily indicative of what would have occurred had the acquisition and related transactions been made at the beginning of the applicable period, or of future results of the company.
Adjusted book value per share represents assets less liabilities and preferred shareholders’ equity excluding the after-tax impact of net unrealized investment gains and losses, divided by the number of shares outstanding. In the opinion of the Company’s management, adjusted book value is useful in an analysis of a property-casualty company’s book value on a nominal basis as it removes the effect of changing prices on invested assets, which do not have an equivalent impact on unpaid claims and claim adjustment expense reserves.
St. Paul Travelers has organized its businesses into the following operating and reporting segments, beginning with the second quarter 2004:
Commercial: Commercial — Core offers a broad array of property and casualty insurance and insurance-related services and is organized into the following three marketing and underwriting groups focusing on a particular client base or product grouping to provide products and services that specifically address clients’ needs: Commercial Accounts, Select Accounts and National Accounts. Commercial — Other includes policies written by Gulf, primarily management and professional liability coverages (prior to the integration of these products into Specialty in April 2004), the Special Liability Group and runoff operations.
Specialty provides dedicated underwriting, claim and risk control services that require specialized expertise, domestically and internationally. Domestic Specialty includes Financial and Professional Services, Bond, Construction, Technology, Ocean Marine, Oil and Gas, Public Sector, and Excess and Umbrella, among others. International Specialty includes operations in the U.K., Ireland, Canada, and the Company’s participation in Lloyds.
Personal writes virtually all types of property and casualty insurance covering personal risks. The primary coverages in this segment are personal automobile and homeowners insurance sold to individuals.
Discontinued Operations (Asset Management) comprises Nuveen Investments, whose core businesses are asset management and related research, as well as the development, marketing and distribution of investment products and services for the affluent, high net worth and institutional market segments. The Company held a 31% interest in Nuveen Investments as of June 30, 2005. During the third quarter of 2005 the Company divested its remaining ownership interest of Nuveen Investments.
* * * * *
Segment results for periods beginning prior to April 1, 2004 have been restated from the historical presentation of Travelers to conform to the new St. Paul Travelers segment arrangement where practicable. As a result, prior quarter Bond and Construction results were disaggregated from historical Travelers Commercial Lines segment to create a historical Specialty segment and to restate Commercial into the new format. Beginning in the second quarter of 2005, the results of Discover Re are now included in the Commercial segment. Previously, Discover Re’s results were included in the Specialty segment. All prior quarters have been restated to conform with the second quarter 2005 presentation.
Invested and other assets and net investment income (NII) of historical Travelers had been specifically identified by reporting segment prior to the merger. Beginning in the second quarter 2004, the Company developed a methodology to allocate NII and invested assets to the identified segments. This methodology allocates pretax NII based upon an investable funds concept, which takes into account liabilities (net of non-invested assets) and appropriate capital considerations for each segment. It is not practicable to apply the methodology to historical businesses and as such, actual (versus allocated) NII is included in revenues and operating income of the restated segments for periods prior to the merger. It is also not practicable to present total assets for restated Specialty and Commercial segments for periods prior to the merger. The Company believes that the differences, if any, are not significant to a comparison with the new segment presentation.
36