Fire 13Merger–go page 9, with new logo42lines
Flag: Done Deal
St. Paul Merges
With Travelers
After finally gaining all the requisite regulatory and shareholder approvals, The St. Paul Companies and Travelers Property Casualty Corp. formally merged to become The St. Paul Travelers Companies on April 1.
The two carriers did encounter some bumps on the road. For example, there were three securities class-action lawsuits opposing the merger. But on March 18, the companies entered into a memorandum of understanding, settling with the plaintiffs in all pending lawsuits.
The combined corporation cuts an impressive figure The St. Paul Travelers Companies is the second-largest U.S. insurer in commercial lines, with some 7.6 percent national market share, second only to the New York-based American International Group, with about 8.8 percent.
The St. Paul Travelers would also have the second-biggest market share for personal lines agency writers at around 6.8 percent, second only to Progressive, with 13.1 percent. Geographically, the combined carrier will be the biggest commercial lines writer in 22 states, when calculated by direct premiums written from two merged businesses.
There are potential gains from synergy generated by the merger, said Standard & Poor's Ratings Director John Iten. He noted there are specialty products offered by St. Paul that Travelers didn't necessarily have, while in the small-commercial arena, "St. Paul was building up theirs, but Travelers had a stronger position there."
Mr. Iten also predicted this mega-merger will prove to be the exception more than the norm for property-casualty insurers this year. "We still anticipate more transactions involving books of business as opposed to holding companies," he said.
Beginning April 2, the merged insurer started trading under a new symbol STA at the New York Stock Exchange, where the two companies' shares had previously been listed.
Reproduced from National Underwriter Edition, April 2, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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