Moody's lifts Travelers view to positive

Moody's Investors Service said it changed the outlook on The Travelers Cos., Inc. to positive from stable and affirmed the company's A3 senior unsecured debt rating.

The agency said the outlook change reflects Travelers' strong core operating performance in 2005 and 2006 - notwithstanding significant catastrophe-related losses in 2005 - and a commensurate improvement achieved over the past two years in the group's operational leverage and risk-adjusted capitalization measures. In addition, earnings and dividend capacity measures relative to interest expense remain very strong.

Moody's noted that a continuation of Travelers' strengthened credit fundamentals and internal capital generation, together with incremental reductions in certain credit risk factors such as reduced volatility from catastrophe-related exposures and a decline in exposure to further adverse development on latent liabilities, could lead to an upgrade of the company's ratings over the near to medium term.

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