QUESTIONS & ANSWERS RE ACQUISITION OF LONDON GUARANTEE
August 3, 2001
1. Q: When will regulatory approval be received?
A: We expect to close within three to five months after regulatory approval has been received.
2. Q: What will happen to the London Guarantee agency force?
A: One of the positive elements of this merger is the combined strength of the current distribution forces. Details on the integration of the distribution systems of London Guarantee, Northern Indemnity and St. Paul Canada will be developed and communicated over the next several months as part of the overall transition process.
3. Q: Can London Guarantee agents (who are not Northern Indemnity agents or St. Paul Canada agents) now represent Northern Indemnity or St. Paul Canada and vice-versa?
A: Until the closing, we will handle all agency appointments by either company in a "business as usual" fashion. We will share post-close information with you as we near the closing date.
4. Q: How does this acquisition affect the way we do business today?
A: It doesn't. Until the closing of the acquisition, it is "business as usual." Both companies are interested in helping you retain existing accounts and write new business.
5. Q: Will there be a change in underwriting appetite as a result of the combined organization?
A: The change will be larger capacity and an expanded product portfolio. The combined organization will help you serve a broader customer base, bringing together the strengths and specialties of each of the organizations.
6. Q: How will the companies be integrated after the close of the deal?
A: The current plan is for Northern Indemnity to be integrated into London Guarantee, which will eventually be integrated with St. Paul Canada.
7. Q: Who will lead the consolidated companies?
A: The combined organization allows for high caliber, talented management staff from each of the companies to serve in prominent roles. Overall, this new organization will be led by Bob Fellows, President, St. Paul Canada. More decisions about leadership will be shared with you at a later date.
8. Q: Will you maintain the same field structure and locations?
A: Plans are to maintain a presence in all of the cities (Vancouver, Calgary, Toronto Edmonton, and Montreal) collectively served by both companies today, with the possibility of adding more locations in the future.
9. Q: Will there be an impact on the financial strength of The St. Paul?
A: We don't expect any negative impact on our ratings. Upon closing of the acquisition, London Guarantee will benefit from The St. Paul Travelers Companies strong ratings. St. Paul ratings, as of Sept. 2000:
Organization Rating
A.M. Best A+A+ is the second highest rating available [based upon a scale from A++ to D]
Moody's Aa2Aa2 is the second highest rating available [based upon a scale from Aaa to C]
Standard & Poor's AAAA is the second highest rating available [based upon a scale from AAA to CC]
10. Q: Will there be any changes to Canadian agency contracts and agency compensation plans?
A: It is business as usual until closing. In the meantime, communications over the coming weeks and months will spell out how we expect to integrate the collective distribution systems.
11. Q: Will Northern Indemnity and St. Paul Canada continue to compete with London Guarantee for business in the short-term?
A: Until closing, it's truly "business as usual," even to the point of each company continuing to compete for business. Needless to say, integration plans will address this issue as quickly as possible.
Contacts:
George Petropoulos
Executive Vice-President & CEO
St. Paul Guarantee Insurance Company
(800) 330-5033
Bob Fellows
President
St. Paul Canada
(416) 366-8301
Rob Burns
Senior Vice-President
St. Paul Guarantee Insurance Company
(800) 330-5033
