St. Paul, Travellers to merge in US$16 billion deal

U.S.-based The St. Paul Companies Inc. and Travelers Property Casualty Corp. have announced they will merge to form the second-largest insurer south of the border. The deal, valued at US$16 billion, is a tax-free, stock-for-stock merger that has been approved by both company boards.
The new entity, to be known as The St. Paul Travelers Cos., will have total assets of US$107 billion, and net written premiums of US$20 billion. The company will have different divisions headquartered in existing offices, including Minnesota (corporate headquarters and specialty lines), Hartford (commercial and personal lines), and London (international business).
St. Paul CEO Jay Fishman will be the new company’s CEO, with Travelers CEO Robert Lipp staying on until the New Year to act as chairman.
“At a time of industry consolidation, we are putting together two outstanding companies with excellent brands and reputations, and similar operating discipline and underwriting skills, to create a significantly larger and more diversified enterprise with a greater ability to assume and manage risk,” says Fishman.
In Canada, St. Paul operates under the brands St. Paul Canada and St. Paul Guarantee Insurance Co., while Travelers also has two operations: Travelers Casualty & Surety Co. of Canada, and The Travelers Indemnity Co. Combined, the four operations had net written premiums in excess of $325 million in 2002.