Moody's confirms St. Paul, units

Moody's Investors Service said it has confirmed the long-term and short-term ratings of The St. Paul Cos. Inc. and subsidiaries (insurance financial strength of St. Paul Fire and Marine Insurance Co. and its rated pooled affiliates at A1, senior unsecured debt at A3, and rating for commercial paper at Prime-2).

Ratings confirmed with a stable outlook include The St. Paul Cos.' senior unsecured debt at A3 and commercial paper at Prime-2.

With the current rating action, Moody's outlook for the insurance financial strength of St. Paul Fire and Marine Insurance Co. and its rated pooled affiliates (Fire & Marine) has been revised to positive from stable.

The rating action follows Monday's announcement of a definitive merger agreement between The St. Paul Cos. Inc. and Travelers Property Casualty Corp., creating the nation's second-largest commercial insurer, to be known as The St. Paul Travelers Cos.

The rating agency explained that St. Paul's ratings continue to reflect the company's strong position in several commercial property-casualty market segments and its earnings diversification through its substantial ownership position in Nuveen Investments Inc., a publicly-traded investment management services firm.

In addition, underwriting initiatives at St. Paul, combined with improving market conditions in the insurance sector continue to support earnings improvement and organic capital generation as evidenced by the company's earnings during 2003.

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