A report that The St. Paul Travelers Companies of St. Paul, Minn. is discussing the possibility of a merger with Switzerland's Zurich Financial Services could signal that the U.S. company is having difficulty expanding, an analyst suggested today.
Bear Stearns Analyst David Small, reacting to a Wall Street Journal article that preliminary talks between the two firms were underway, commented that over the past year, St. Paul Travelers management "has consistently discussed a desire to grow.''
He said he suspected "this news means that the company is having trouble growing organically, as many of its core markets are softening. We have heard from both commercial brokers and retail agents that [St. Paul Travelers] has been aggressive on price and terms in many lines of business."
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