The St. Paul Cos. and Travelers Property Casualty to Merge

November 17, 2003

The St. Paul Companies Inc. and Travelers Property Casualty Corp. announced that they have signed a definitive merger agreement that will create the nation’s second largest commercial insurer, to be known as The St. Paul Travelers Companies. The combined company will be a leading provider of property casualty insurance products distributed through independent agents and brokers and one of the largest financial services companies in the United States. It is expected to have total assets of $107 billion, shareholders’ equity of $20 billion, total capital of $26 billion and net written premiums of $20 billion. With unparalleled product breadth and geographic reach, the combined entity will be uniquely positioned as the property casualty insurer of choice for agents, brokers and customers across the United States.

The Board of Directors of each company has unanimously agreed to the tax-free, stock-for-stock merger. Under the terms of the merger agreement, holders of Travelers Class A and Class B common stock will each receive 0.4334 St. Paul common shares for each Travelers share. The combined company is expected to pay dividends at the annual rate of $0.88 per share. In addition, The St. Paul expects to pay a special dividend to its shareholders prior to the closing, so that in 2004, shareholders of The St. Paul will receive dividends amounting to The St. Paul’s current indicated annual rate of $1.16 per share. The transaction is subject to customary closing conditions, including the approval by the shareholders of both companies as well as certain regulatory approvals. The transaction is expected to close in the second quarter of 2004.

The St. Paul Travelers Companies will remain a Minnesota corporation and will have its corporate headquarters in Saint Paul, Minnesota. The specialty insurance lines, which will be known as St. Paul Specialty, will be based in Saint Paul. The St. Paul’s international business will continue to be based in London. The combined company’s commercial lines and personal lines business will be consolidated under the Travelers brand and based in Hartford, Connecticut. The company will also continue to own The St. Paul’s nearly 80 percent interest in Nuveen Investments, an asset management company serving affluent and high net worth investors.

Jay S. Fishman, chairman and CEO of The St. Paul, will serve as CEO of the combined company, reporting to the new Board of Directors. Robert I. Lipp, 65, chairman and CEO of Travelers, will serve as the company’s executive chairman until Jan. 1, 2006, at which time it is anticipated that Fishman will become chairman as well as CEO. The new Board of Directors will consist of all current outside directors of both companies as well as Lipp and Fishman, resulting in a total of 12 directors from Travelers and 11 from The St. Paul.

The combined company will have a leading position in national accounts, which is a traditional strength of Travelers, and in the highly attractive middle market and small commercial agency businesses. The combination will also benefit from The St. Paul’s expertise and focus in specialty lines. The company will rank #2 in domestic commercial lines, #2 in agent distributed personal lines, #5 overall among domestic property and casualty companies, and will be one of the top three commercial insurers in 42 states and the District of Columbia, according to direct written premium data compiled by AM Best.

The companies also announced today that Charles J. Clarke, president of Travelers, will become vice chairman of The St. Paul Travelers Companies. Douglas G. Elliot, currently COO of Travelers, will become CEO of the combined general commercial and personal lines businesses. T. Michael Miller, executive vice president and CEO of Specialty Commercial at The St. Paul, will become CEO of the combined specialty insurance operations. Marita Zuraitis, CEO of The St. Paul’s commercial insurance operations, will become executive vice president of the combined company, initially focused on the integration process. She will also work with Fishman on operational strategy. Brian MacLean, executive vice president of claim at Travelers and Timothy M. Yessman, CEO of claim at The St. Paul, will both become executive vice presidents in the combined claim operation. John A. MacColl, currently vice chairman of The St. Paul, will continue as a vice chairman of the combined company.

As a result of the combination, The St. Paul Travelers Companies, its shareholders, employees, agents, and customers should benefit from its:

*Considerable financial strength.
*Depth and breadth of product offerings.
*Strong distribution presence with enhanced geographic coverage across the U.S.
*Experienced and well-regarded management team.
*Successful track record in integrating businesses.
*Enhanced growth opportunities, with greater diversity and stability of earnings.
*Greater efficiencies and economies of scale.

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