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TRAVELERS CORPORATION SENIOR AND SUBORDINATED DEBT RATINGS REAFFIRMED; COMMERCIAL PAPER RATING REAFFIRMED; PREFERRED STOCK RATING REAFFIRMED

 CHICAGO, Feb. 4 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has reaffirmed all credit and commercial paper ratings for the Travelers Corporation, it was announced today. Ratings reaffirmed for the Travelers Corporation include: senior debt rating of "A" (Single-A); subordinated debt rating of "A-" (Single-A-Minus); commercial paper rating of "Duff 1"; and cumulative preferred stock rating of "BBB+" (Triple-B-Plus). The "AA-" (Double-A-Minus) claims paying ability ratings assigned to all the Travelers' Property and Casualty Group of companies have also been reaffirmed. The claims paying ability of The Travelers Insurance Company has been lowered from "AA-" (Double-A-Minus) to "A+" (Single-A-Plus). Duff & Phelps has reaffirmed The Travelers Insurance Company's commercial paper rating of "Duff 1".
 The Travelers Corporation ratings reflect the $1.4 billion of capital raised throughout 1992, offset by: (1) the capital absorbed by hurricane losses; (2) larger than expected increases to valuation reserves for underperforming mortgage and real estate assets; and (3) larger than expected losses incurred in life insurance subsidiaries.
 The Travelers Corporation has announced that it added $735 million to its real estate reserves and took an associated after-tax charge of $485 million in the fourth quarter of 1992. The addition to real estate reserves was significantly above expectations, but partly reflects an increased emphasis to dispose of underperforming real estate assets. The company expects no further real estate-related valuation reserving additions in 1993, and the underperforming mortgage and real estate portfolio has not increased in aggregate in recent quarters.
 The Travelers Corporation's net loss for the full year of 1992 was $658 million and includes an additional $59 million fourth quarter charge for after-tax losses associated with Hurricane Andrew and an additional $79 million after tax in charges for other items. The Traveler's property/casualty claims paying ratings reflect the ability of these operations to maintain an acceptable level of leverage based on their risk profile. Strategic repositioning in these business units is continuing and significant steps have been taken to: (1) lower catastrophe exposure through additional reinsurance; (2) improve underwriting; and (3) reduce the amount of business written in unprofitable lines. Our outlook is for core statutory operating profitability of the property/casualty units to modestly improve in 1993.
 The Travelers Insurance Company (life operations) claims paying ability rating was lowered, reflecting: (1) the larger than expected statutory net loss experienced during 1992; (2) increased pressure on statutory capital from anticipated writedowns of mortgage and real estate assets; and (3) the continuing negative effect on investment income from underperforming real estate-related assets. The impact on statutory capital from these elements was primarily offset through capital additions from Travelers Corporation, leaving operating leverage marginally improved in 1992. We expect statutory adjusted surplus (including valuation reserves) to be under pressure during 1993 as losses from disposition of underperforming assets are incurred. However, the Travelers Corporation has significant capital available to support subsidiary operations and we expect capital contributions to be made to The Travelers Insurance Company if necessary.
 -0- 2/4/93
 /CONTACT: Kevin A. Ceurvorst, CFA, 312-368-3144, or Timothy A. Bienek, 312-368-3192, both of Duff & Phelps, 312-368-3125/
 (TIC)


CO: Travelers Corporation ST: IN: INS SU: RTG

TS -- NY063 -- 2947 02/04/93 11:47 EST
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Publication:PR Newswire
Date:Feb 4, 1993
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