Moody's ups St. Paul Travelers outlook to stable

Moody's Investors Service said it affirmed The St. Paul Travelers Cos. Inc. A3 senior unsecured debt ratings and changed the outlook on the company's long-term ratings to stable from negative.

The agency said the affirmations and outlook change based on the company's strong core operating performance in 2005 - notwithstanding significant catastrophe-related losses in the third and fourth quarters - and on commensurate improvement achieved over the past year in the group's operational leverage and risk-adjusted capitalization measures.

Additionally, Moody's said it believes that uncertainties related to integration risks associated with acquisition of The St. Paul Cos. Inc. in 2004 and the adequacy of the group's loss reserve profile have declined.

General ongoing credit concerns include uncertainties regarding the ultimate costs associated with mass tort liabilities, the agency said, as well as the group's significant regional catastrophe exposures, especially in the Gulf Coast and northeast Atlantic regions.

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