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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): APRIL 17, 1997
TRAVELERS PROPERTY CASUALTY CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 1-14328 06-1445591
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (860) 277-0111
<PAGE> 2
TRAVELERS PROPERTY CASUALTY CORP.
CURRENT REPORT ON FORM 8-K
ITEM 5. OTHER EVENTS
Travelers Property Casualty Corp. (formerly Travelers/Aetna Property Casualty
Corp.) (the "Registrant") is filing this Current Report on Form 8-K to provide
certain additional financial information of the Registrant as of March 31, 1997,
which information is also being disclosed to members of the research analyst
community.
2
<PAGE> 3
CONSOLIDATED BALANCE SHEET
(in millions, except shares) Travelers Property Casualty Corp.
<TABLE>
<CAPTION>
MARCH 31, DEC. 31,
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
ASSETS
Fixed maturities, available for sale at fair value
(cost, $24,183.8; $24,052.3) $24,065.1 $24,445.9
Equity securities, at fair value (cost, $929.7; $756.0) 937.5 778.6
Mortgage loans 934.5 1,005.6
Real estate held for sale 215.1 156.7
Short-term securities 2,854.3 2,311.3
Other investments 432.7 666.2
--------- ---------
Total investments 29,439.2 29,364.3
--------- ---------
Cash 105.7 106.0
Investment income accrued 371.5 381.1
Premium balances receivable 3,171.5 2,976.0
Reinsurance recoverables 9,798.4 9,714.3
Deferred acquisition costs 463.6 426.4
Deferred federal income taxes 1,785.9 1,583.2
Contractholder receivables 1,879.6 1,828.2
Other assets 3,540.6 3,399.6
--------- ---------
Total assets $50,556.0 $49,779.1
========= =========
LIABILITIES
Claims and claim adjustment expense reserves $31,287.0 $31,176.7
Unearned premium reserves 3,803.0 3,554.3
Contractholder payables 1,879.6 1,828.2
Commercial paper -- 25.0
Long-term debt 1,249.3 1,249.3
Other liabilities 5,089.8 4,565.8
--------- ---------
Total liabilities 43,308.7 42,399.3
--------- ---------
TAP - obligated mandatorily redeemable preferred securities
of subsidiary trusts holding solely junior subordinated debt
securities of TAP 900.0 900.0
Stockholders' equity
Common Stock:
Class A, $.01 par value, 700 million shares authorized;
(issued shares, 72,393,407; 71,979,829) 0.7 0.7
Class B, $.01 par value, 700 million shares authorized,
328,020,170 issued and outstanding 3.3 3.3
Additional paid-in capital 5,473.0 5,455.0
Retained earnings 992.3 749.2
Treasury stock, at cost (shares, 343,000; 406,860) (12.3) (12.9)
Unrealized gain (loss) on investment securities, net of tax (77.2) 284.5
Unearned compensation (32.5) --
--------- ---------
Total stockholders' equity 6,347.3 6,479.8
--------- ---------
Total liabilities and stockholders' equity $50,556.0 $49,779.1
========= =========
</TABLE>
3
<PAGE> 4
Travelers Property Casualty Corp.
COMBINED RATIOS (BEFORE POLICYHOLDER DIVIDENDS) (UNAUDITED)
PROPERTY CASUALTY OPERATIONS
<TABLE>
<CAPTION>
1Q 2Q 3Q 4Q 1Q
1996 1996 1996 1996 1997
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
GAAP COMBINED RATIO: (1)
Loss and loss adjustment expense ratio 82.4% 104.8% 75.7% 71.9% 73.0%
Other underwriting expense ratio 25.9% 39.0% 30.1% 34.9% 27.0%
----- ----- ----- ----- -----
Combined ratio 108.3% 143.8% 105.8% 106.8% 100.0%
----- ----- ----- ----- -----
Excluding net charges related to the
acquisition and integration of Aetna P&C:
Loss and loss adjustment expense ratio 82.4% 77.1% 75.7% 72.2% 73.0%
Other underwriting expense ratio 25.9% 32.6% 30.1% 33.1% 27.0%
----- ----- ----- ----- -----
Combined ratio 108.3% 109.7% 105.8% 105.3% 100.0%
----- ----- ----- ----- -----
STATUTORY COMBINED RATIO:
Loss and loss adjustment expense ratio 82.9% 108.7% 75.7% 74.6% 73.7%
Other underwriting expense ratio 27.0% 34.3% 31.0% 31.0% 28.0%
----- ----- ----- ----- -----
Combined ratio 109.9% 143.0% 106.7% 105.6% 101.7%
----- ----- ----- ----- -----
Excluding net charges related to the acquisition
and integration of Aetna P&C:
Loss and loss adjustment expense ratio 82.9% 76.5% 75.7% 72.7% 73.7%
Other underwriting expense ratio 27.0% 30.7% 31.0% 30.5% 28.0%
----- ----- ----- ----- -----
Combined ratio 109.9% 107.2% 106.7% 103.2% 101.7%
----- ----- ----- ----- -----
</TABLE>
(1) Beginning in 1997, for purposes of computing GAAP combined ratios, fee
income is now allocated as a reduction of losses and loss adjustment
expenses and other underwriting expenses. Previously fee income was
included with premiums for purposes of computing GAAP combined ratios. Fee
income allocated as a reduction of losses and loss adjustment expenses and
other underwriting expenses in the GAAP combined ratios was $48.9 million
and $44.2 million in 1Q96, $53.9 million and $46.7 million in 2Q96, $55.0
million and $45.6 million in 3Q96, $53.8 million and $43.5 million in 4Q96
and $51.5 million and $45.5 million in 1Q97, respectively. 1996 GAAP
combined ratios have been restated to conform to the current year's
presentation.
Note: Financial data for The Aetna Casualty and Surety Company and The Standard
Fire Insurance Company (Aetna P&C) is included from the date of
acquisition (April 2, 1996).
4
<PAGE> 5
INVESTMENT OPERATIONS (UNAUDITED) Travelers Property Casualty Corp.
(in millions)
<TABLE>
<CAPTION>
AS OF AS OF
MARCH 31, PRE-TAX BOOK DEC. 31, PRE-TAX BOOK
1997 YIELD 1996 YIELD
--------- ------------ --------- ------------
<S> <C> <C> <C> <C>
INVESTMENT PORTFOLIO
Taxable fixed maturities (including redeemable preferred stock) $18,942.3 7.16% $19,339.1 7.12%
Tax-exempt fixed maturities 5,122.8 5.64 5,106.8 5.60
Non-redeemable preferred stocks 678.3 6.45 603.2 6.29
Common stocks 259.2 0.43 175.4 0.03
Mortgage loans 934.5 10.81 1,005.6 11.62
Real estate held for sale 215.1 9.68 156.7 14.27
Short-term securities 2,854.3 5.46 2,311.3 5.48
Other investments (1) 432.7 n/a 666.2 n/a
--------- ----- --------- -----
TOTAL INVESTMENTS $29,439.2 6.78% $29,364.3 6.85%
========= ===== ========= =====
Unrealized gain (loss) on investment securities, net of tax $ (77.2) $ 284.5
========= =========
</TABLE>
(1) Primarily includes securities partnership interests held for long-term
appreciation. Other investments that generate only intermittent income are
also included in this category and yields fluctuate accordingly.
5
<PAGE> 6
SELECTED FIXED-INCOME INVESTMENT DATA Travelers Property Casualty Corp.
(in millions)
<TABLE>
<CAPTION>
AS OF AS OF
MARCH 31, DEC. 31,
1997 1996
--------- ---------
(Unaudited)
<S> <C> <C>
FIXED-INCOME INVESTMENT PORTFOLIO (AT CARRYING VALUE)
FIXED-INCOME INVESTMENTS
Available for sale, at fair value:
Mortgage-backed securities - principally obligations
of U.S. Government agencies $ 4,875.8 $ 4,527.2
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies 1,914.9 2,450.6
Corporates (including redeemable preferreds) 11,455.1 11,653.4
Obligations of states and political subdivisions 5,217.9 5,218.8
Debt securities issued by foreign governments 601.4 595.9
--------- ---------
Total fixed-income investments $24,065.1 $24,445.9
========= =========
</TABLE>
FIXED-INCOME INVESTMENTS
QUALITY CHARACTERISTICS* (UNAUDITED)
(As of March 31, 1997)
<TABLE>
<CAPTION>
AMOUNT % OF TOTAL
--------- -----------
<S> <C> <C>
QUALITY RATINGS
Aaa $10,176.7 42.3%
Aa 3,756.1 15.6
A 6,230.9 25.9
Baa 3,204.3 13.3
--------- ---------
Total investment grade 23,368.0 97.1
--------- ---------
Ba 592.8 2.5
B 82.7 0.3
Caa and lower 21.6 0.1
--------- ---------
Total below investment grade 697.1 2.9
--------- ---------
Total fixed-income investments $24,065.1 100.0%
========= =========
Average weighted quality AA3
---------
Average duration of fixed maturities and short-term securities 4.8 years
=========
</TABLE>
* Rated using external rating agencies, or by TAP's internal analysts when a
public rating does not exist. Below investment grade assets refer to
securities rated "Ba1" or below.
6
<PAGE> 7
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 17, 1997
Travelers Property Casualty Corp.
By: /s/ William P. Hannon
-----------------------------
William P. Hannon
Chief Financial Officer
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