Fitch Rates Travelers' Planned Issuance 'A(EXP)'

CHICAGO--()--Fitch Ratings has assigned an 'A(EXP)' rating to The Travelers Companies, Inc. (NYSE: TRV) planned $400 million issuance of 30 year senior unsecured notes. The rating is equivalent to Fitch's ratings on TRV's currently outstanding senior notes.

Fitch anticipates TRV using the proceeds from the planned issuance to repay $400 million in outstanding senior notes maturing in December 2015.

KEY RATING DRIVERS

The 'A(EXP)' rating reflects expectations that TRV's capitalization and interest coverage will not materially change from levels reported at June 30, 2015. Specifically, Fitch expects that the financial leverage ratio will be approximately 23% and operating EBIT will cover fixed charges by approximately 13x.

TRV's ratings are supported by a strong competitive position as a top six U.S. property/casualty insurer, an adequate reserve position, prudent capital management, a history of solid earnings and financial flexibility.

RATING SENSITIVITIES

Key rating triggers that could lead to a downgrade include:

--Capitalization at the underwriting subsidiaries that is inconsistent with standards for the current rating category such as consolidated statutory net leverage greater than 4.5x, a long term increase in the financial leverage ratio to greater than 25% or a deterioration in the Prism score to below the 'Very Strong' category.

--A GAAP fixed charge coverage ratio less than 8x on a run rate basis.

--A sustained period of net losses or catastrophe losses out of proportion with the company's market share.

Key rating triggers that could lead to an upgrade include:

--Improvement in TRV's capitalization measured by a Prism score of 'Extremely Strong'. However, given publicly traded companies' sensitivity around managing capital, this level of overcapitalization is unlikely.

--Sustained underwriting performance across business lines that is clearly better than the industry and similarly-rated peers.

Fitch assigned the following rating:

The Travelers Companies, Inc.

--Senior notes due 2045 rated 'A(EXP)'.

Additional information is available on www.fitchratings.com.

Applicable Criteria

Insurance Rating Methodology (pub. 14 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=868367

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=989594

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=989594

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Douglas M. Pawlowski, CFA
Senior Director
+1-312-368-2054
Fitch Ratings, Inc.
70 West Madison St.
Chicago, IL 60602
or
Secondary Analyst
Gerry Glombicki, CPA
Director
+1-312-606-2354
or
Committee Chairperson
Jeff A. Mohrenweiser
Senior Director
+1-312-368-3182
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Douglas M. Pawlowski, CFA
Senior Director
+1-312-368-2054
Fitch Ratings, Inc.
70 West Madison St.
Chicago, IL 60602
or
Secondary Analyst
Gerry Glombicki, CPA
Director
+1-312-606-2354
or
Committee Chairperson
Jeff A. Mohrenweiser
Senior Director
+1-312-368-3182
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
alyssa.castelli@fitchratings.com