The St. Paul Companies Reports First-Quarter Results

* Operating earnings $0.75 per share, up 19%

* Property-liability net written premiums up 32%

* Book value per share up 6% over one year ago to $32.92



Apr 24, 2001, 01:00 ET from The St. Paul Companies

    ST. PAUL, Minn., April 24 /PRNewswire Interactive Press Release/ -- The
 St. Paul Companies (NYSE:   SPC) today announced first-quarter 2001 operating
 earnings from continuing operations of $173.9 million, or $0.75 per diluted
 share, compared with $150.3 million, or $0.63 per share in the first quarter
 of 2000.
     "These strong results demonstrate that the aggressive refocusing of our
 business we have pursued over the past two years has positioned us extremely
 well to benefit from tightening insurance market conditions," said Chairman
 and Chief Executive Officer Douglas W. Leatherdale.
     "Net written premiums, at $1.85 billion, were up 32 percent over last
 year's first quarter, driven by price increases, higher retentions and an
 increase in new business.  The underlying fundamentals of our business are
 continuing to show accelerating improvement, with most of our
 property-liability operations and our reinsurance operations bringing in
 combined ratios under 100, while continuing to achieve strong growth.
     "Importantly, our book value per share increased to $32.92 from $30.99
 one year ago.  Adjusting our holdings of money manager John Nuveen to market,
 our book value per share is $35.69," continued Leatherdale.
     "Based on our performance to date and trends we see in the market, and
 barring unforeseen events in the balance of the year, we remain confident in
 our previous guidance for 2001 of operating earnings in the range of $3.00 to
 $3.25 per share, based on a loss ratio of 71 to 73, an expense ratio of 31 or
 lower and premium growth above 15 percent.
     "The company reported net income of $0.87 per share in the first quarter
 of 2001, vs. $1.51 for the comparable quarter last year, which benefited from
 $0.90 per share of after-tax investment gains, primarily due to the sale of
 one venture capital investment.
     "Since Jan. 1, we returned $200 million in capital to shareholders through
 the repurchase of 4.5 million shares at an average price of $44.16.
 Repurchasing St. Paul stock continues to be a very attractive use of
 shareholder funds," Leatherdale said.  "Since we began our share repurchase
 program in 1998, we have repurchased more than $1.2 billion of stock."
 
 
     Consolidated Financial Summary
     (in millions except per-share amounts)
 
     Three months ended March 31                         2001           2000
 
     Revenues (including realized gains)             $2,354.8       $2,263.4
 
     Pretax Operating Earnings
       From Continuing Operations                      $240.1         $204.0
 
     Income Tax Expense                                 $66.2          $53.7
 
     Operating Earnings                                $173.9         $150.3
 
       Per Common Share (Basic)                         $0.78          $0.66
       Per Common Share (Diluted)                       $0.75          $0.63
 
     Realized Investment Gains, Net of Taxes            $34.7         $211.8
 
       Per Common Share (Basic)                         $0.16          $0.96
       Per Common Share (Diluted)                       $0.15          $0.90
 
     Discontinued Operations, Net of Taxes              ($6.4)         ($4.6)
 
       Per Common Share (Basic)                        ($0.03)        ($0.02)
       Per Common Share (Diluted)                      ($0.03)        ($0.02)
 
     Net Income                                        $202.2         $357.5
 
       Per Common Share (Basic)                         $0.91          $1.60
       Per Common Share (Diluted)                       $0.87          $1.51
 
     Balance Sheet Data (as of March 31)
 
     Assets                                         $41,668.6      $38,912.6
 
     Common Shareholders' Equity                     $7,067.4       $6,563.1
 
     Common Shares Outstanding                          214.7          211.8
 
     Book Value Per Common Share                       $32.92         $30.99
 
 
                          BUSINESS SEGMENT HIGHLIGHTS
 
     Property-Liability Financial Summary
 
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
 
     Net Written Premiums                            $1,845.8       $1,399.9
       Percentage Change from 2000                       31.9%
 
     Combined Ratio                                     103.8          107.6
 
 
     *  Overall, The St. Paul's property-liability business showed marked
        progress, with a 3.8 point improvement in the combined ratio.
        Excluding the benefits of the 2000 corporate reinsurance program, the
        improvement was nearly 7 points.  The expense ratio improved by
        0.7 points, reflecting the company's continuing focus on expense
        management.
 
     *  During the first quarter, price increases continued to accelerate, with
        total U.S. insurance operations pricing up nearly 16 percent, compared
        with an 11.5 percent increase in the fourth quarter of 2000.
 
     Commercial Lines Group
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $491.1         $391.7
       Percentage Change from 2000                       25.4%
 
     Combined Ratio                                      79.7          106.4
 
 
     *  Price increases continue to drive improvement, with Commercial Lines
        pricing up 11.8 percent in the first quarter after increasing
        10.3 percent in 2000.
 
     *  Retentions remain high, with standard commercial approaching 90 percent
        and overall new business up from 22 percent in 2000 to 24 percent in
        the first quarter.
 
     *  On an accident-year basis, the combined ratio was 103, significantly
        improved from 106 in the first quarter of 2000 and 125 in 1999.
 
     *  The expense ratio improved by 3.7 points, down to 30.5.
 
 
     Global Surety
                                                            Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $105.2         $123.0
       Percentage Change from 2000                      (14.5)%
 
     Combined Ratio                                      84.3           80.1
 
 
     *  Global surety continues to deliver outstanding results.
 
     *  The decline in net written premiums reflects the intentional reduction
        of business, which was begun last year in anticipation of an economic
        slowdown.
 
 
     Global Healthcare
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $176.8         $113.0
       Percentage Change from 2000                       56.5%
 
     Combined Ratio                                     170.8          115.4
 
 
     *  Health Care has made significant progress in its Major Accounts
        business (large, complex health care risks in major metropolitan
        areas).  This segment has implemented price increases averaging
        40 percent to 50 percent; product changes, including lower policy
        limits; and higher risk retention requirements.  However, adverse
        development continues on 1998 and 1999 cases.  It is not clear when
        this prior-period drag will end.
 
     *  During an ongoing strategic review of the Health Care segment, the
        company determined that Health Care's Physicians and Surgeons business
        requires significant rate increases that must quickly be implemented to
        keep pace with loss costs.  Unlike Major Accounts, this business
        requires regulatory approval before rate increases can be applied.
        Over the next three months, the company will be approaching regulators
        in key states and requesting the necessary rate increases.  The
        company's position is to achieve the required increases or discontinue
        underwriting the business, and in 2002, be either a large and
        profitable health care insurer, or a small and profitable health care
        insurer.
 
     Other Specialty
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $461.9         $319.0
       Percentage Change from 2000                       44.8%
 
     Combined Ratio                                      98.0          106.0
 
 
     *  The "Other Specialty" segment, accounting for 25 percent of net written
        premiums, is growing at 45 percent as the company takes advantage of
        superior domestic and global positioning in these businesses.  The
        growth also reflects the impact of small acquisitions.  Its combined
        ratio improved by 8 points.
 
     *  Construction net written premiums grew 51 percent over first-quarter
        2000, driven by price increases, stable retentions and an increase in
        new business.  Price increases averaged more than 15 percent during the
        first quarter of 2001, and its accident-year combined ratio improved by
        9 points over the first quarter of 2000.
 
     *  Technology produced good results and grew 51 percent, as the company
        solidified its pre-eminent position in this market.  Prices increased
        by almost 12 percent, generating an accident-year combined ratio just
        under 100.
 
     *  Financial and Professional Services also produced an accident year
        combined ratio under 100.  Net written premiums grew 31 percent, and
        prices increased 9 percent.
 
 
     International
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $153.1          $62.9
       Percentage Change from 2000                      143.4%
 
     Combined Ratio                                     126.0          123.9
 
 
     *  Non-U.S. markets are beginning to experience the turmoil often seen
        during the initial stages of a hardening market.  Insurance companies
        are withdrawing capacity and raising prices.  The St. Paul has obtained
        significant price increases in Latin America, the United Kingdom,
        Ireland, Canada and Australia.
 
     *  The St. Paul's Lloyd's results account for about half the GAAP losses,
        with a combined ratio of 130.9.  However, price increases averaging
        25 percent to 30 percent in the first quarter are expected to continue
        and should significantly improve profitability going forward.  And, the
        actions taken to reorganize and restructure this business over the past
        year should result in improvement by year-end.
 
     *  In addition, over the next 12 months, the company will continue to
        consolidate its Lloyd's operation's back office and staff functions
        into a single, efficient operation to provide better service and
        improve the expense ratio.  The St. Paul Lloyd's operation will
        concentrate on specialty business and eliminate all multi-class, or
        nonspecialty, business across all its syndicates.
 
     *  The company is forecasting a 115 combined ratio for Lloyd's full-year
        2001, with net written premiums of about $500 million.  The first
        quarter represents only 10 percent of the annualized premium.
 
     *  The St. Paul is also determined to rehabilitate problem business in the
        remaining non-Lloyd's, non-U.S. international operations in one year.
        This business -- $55 million of primarily European business -- reported
        a combined ratio of 131 in the first quarter.  If there is any portion
        of those operations that is not profitable, or cannot be made
        profitable in one year, the company will exit from that business.
 
     *  While International growth is expected to slow from its historical
        30 percent to close to zero, profitability is expected to improve
        dramatically over the next six quarters.
 
 
     Reinsurance
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $457.7         $390.3
       Percentage Change from 2000                       17.3%
 
     Combined Ratio                                     100.0          114.2
 
 
     *  The Reinsurance combined ratio improved dramatically, to 100 in the
        first quarter. Price increases and underwriting initiatives have been
        successful.
 
     *  There were $41 million in two positive events in the first quarter:
        Reinsurance benefited by $23 million from reinsurance policies when
        some old events were newly designated as catastrophes.  And,
        catastrophe losses in the first quarter were $18 million less than
        anticipated.
 
     *  Partially offsetting these benefits were $28 million in two other
        first-quarter events:  Petrobras losses of $15 million and North
        American casualty reserve increases of $13 million.
 
 
     Life Insurance Financial Summary
 
                                        1Q-2001         1Q-2000
                                              (in millions)
     Revenues                            $212.9          $118.7
     Expenses                            $193.9           $99.7
     After-tax Operating Earnings         $14.3           $14.1
     Total Assets                      $6,818.8        $5,902.0
 
     *  F&G Life continues to have very strong fundamental growth.  Annualized
        sales in the quarter were over two times the comparable period last
        year.
 
     *  Invested assets have continued to grow, up 12 percent since year-end
        2000.
 
     *  Individual life insurance coverage in force was $18.65 billion, up
        9 percent since year-end 2000.
 
     *  Margins have come under pressure due to higher new product development
        and advertising costs in the first quarter.  We remain confident that
        earnings growth will hit our target of 10 percent this year.
 
     Asset Management Financial Summary
                                        1Q-2001         1Q-2000
                                              (in millions)
 
     Revenues                             $86.9           $99.6
     Expenses                             $41.8           $56.7
     St. Paul's Share of
      Income before Taxes                 $34.9           $33.0
     Assets Under Management            $61,289         $59,965
     Share Price                         $54.00          $38.25
 
     *  Nuveen continues its excellent track record and continues to be an
        outstanding investment.
 
     *  Gross sales in the quarter were $3.8 billion -- up 20 percent from the
        year-ago period.
 
     *  Sales of equity and fixed-income retail managed accounts grew
        36 percent to $1.9 billion for the first quarter.
 
     For additional information about The St. Paul's quarterly results,
 including detailed loss and expense ratios, go to the Investor Relations
 section of The St. Paul's Web site, www.stpaul.com .
     The St. Paul Companies, Inc., is headquartered in Saint Paul, Minn., and
 provides commercial property-liability insurance and nonlife reinsurance
 worldwide.  The St. Paul is ranked No. 222 on the Fortune 500 list of largest
 U.S. companies (ranked by 2000 revenue).
 
     Certain statements made by the company in this release may constitute
 forward-looking statements.  Actual results may differ materially from those
 projected in the forward-looking statements.  These forward-looking statements
 involve risks and uncertainties including, but not limited to, the following:
 competitive considerations, including the ability to implement price
 increases; the frequency and severity of catastrophic events; changes in the
 demand for, pricing of, or supply of reinsurance or insurance; increased
 competitive pressure; the loss of significant customers; losses due to foreign
 currency exchange rate fluctuations; general economic conditions, including
 changing interest rates, rates of inflation and the performance of the
 financial markets; judicial decisions and rulings; changes in domestic and
 foreign laws, regulations and taxes; effects of acquisitions and divestitures;
 and various other factors.  We undertake no obligation to release publicly the
 results of any future revisions we may make to forward-looking statements to
 reflect events or circumstances after the date hereof or to reflect the
 occurrence of unanticipated events.
 
     MEDIA CONTACT:  Barbara Reynolds
     U.S. Telephone:  651-310-7399
     E-mail: barbara.reynolds@stpaul.com
 
     INVESTOR CONTACT:  Laura Gagnon
     U.S. Telephone:  651-310-7696
     E-mail: laura.gagnon@stpaul.com
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X08540017
 
 

SOURCE The St. Paul Companies
    ST. PAUL, Minn., April 24 /PRNewswire Interactive Press Release/ -- The
 St. Paul Companies (NYSE:   SPC) today announced first-quarter 2001 operating
 earnings from continuing operations of $173.9 million, or $0.75 per diluted
 share, compared with $150.3 million, or $0.63 per share in the first quarter
 of 2000.
     "These strong results demonstrate that the aggressive refocusing of our
 business we have pursued over the past two years has positioned us extremely
 well to benefit from tightening insurance market conditions," said Chairman
 and Chief Executive Officer Douglas W. Leatherdale.
     "Net written premiums, at $1.85 billion, were up 32 percent over last
 year's first quarter, driven by price increases, higher retentions and an
 increase in new business.  The underlying fundamentals of our business are
 continuing to show accelerating improvement, with most of our
 property-liability operations and our reinsurance operations bringing in
 combined ratios under 100, while continuing to achieve strong growth.
     "Importantly, our book value per share increased to $32.92 from $30.99
 one year ago.  Adjusting our holdings of money manager John Nuveen to market,
 our book value per share is $35.69," continued Leatherdale.
     "Based on our performance to date and trends we see in the market, and
 barring unforeseen events in the balance of the year, we remain confident in
 our previous guidance for 2001 of operating earnings in the range of $3.00 to
 $3.25 per share, based on a loss ratio of 71 to 73, an expense ratio of 31 or
 lower and premium growth above 15 percent.
     "The company reported net income of $0.87 per share in the first quarter
 of 2001, vs. $1.51 for the comparable quarter last year, which benefited from
 $0.90 per share of after-tax investment gains, primarily due to the sale of
 one venture capital investment.
     "Since Jan. 1, we returned $200 million in capital to shareholders through
 the repurchase of 4.5 million shares at an average price of $44.16.
 Repurchasing St. Paul stock continues to be a very attractive use of
 shareholder funds," Leatherdale said.  "Since we began our share repurchase
 program in 1998, we have repurchased more than $1.2 billion of stock."
 
 
     Consolidated Financial Summary
     (in millions except per-share amounts)
 
     Three months ended March 31                         2001           2000
 
     Revenues (including realized gains)             $2,354.8       $2,263.4
 
     Pretax Operating Earnings
       From Continuing Operations                      $240.1         $204.0
 
     Income Tax Expense                                 $66.2          $53.7
 
     Operating Earnings                                $173.9         $150.3
 
       Per Common Share (Basic)                         $0.78          $0.66
       Per Common Share (Diluted)                       $0.75          $0.63
 
     Realized Investment Gains, Net of Taxes            $34.7         $211.8
 
       Per Common Share (Basic)                         $0.16          $0.96
       Per Common Share (Diluted)                       $0.15          $0.90
 
     Discontinued Operations, Net of Taxes              ($6.4)         ($4.6)
 
       Per Common Share (Basic)                        ($0.03)        ($0.02)
       Per Common Share (Diluted)                      ($0.03)        ($0.02)
 
     Net Income                                        $202.2         $357.5
 
       Per Common Share (Basic)                         $0.91          $1.60
       Per Common Share (Diluted)                       $0.87          $1.51
 
     Balance Sheet Data (as of March 31)
 
     Assets                                         $41,668.6      $38,912.6
 
     Common Shareholders' Equity                     $7,067.4       $6,563.1
 
     Common Shares Outstanding                          214.7          211.8
 
     Book Value Per Common Share                       $32.92         $30.99
 
 
                          BUSINESS SEGMENT HIGHLIGHTS
 
     Property-Liability Financial Summary
 
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
 
     Net Written Premiums                            $1,845.8       $1,399.9
       Percentage Change from 2000                       31.9%
 
     Combined Ratio                                     103.8          107.6
 
 
     *  Overall, The St. Paul's property-liability business showed marked
        progress, with a 3.8 point improvement in the combined ratio.
        Excluding the benefits of the 2000 corporate reinsurance program, the
        improvement was nearly 7 points.  The expense ratio improved by
        0.7 points, reflecting the company's continuing focus on expense
        management.
 
     *  During the first quarter, price increases continued to accelerate, with
        total U.S. insurance operations pricing up nearly 16 percent, compared
        with an 11.5 percent increase in the fourth quarter of 2000.
 
     Commercial Lines Group
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $491.1         $391.7
       Percentage Change from 2000                       25.4%
 
     Combined Ratio                                      79.7          106.4
 
 
     *  Price increases continue to drive improvement, with Commercial Lines
        pricing up 11.8 percent in the first quarter after increasing
        10.3 percent in 2000.
 
     *  Retentions remain high, with standard commercial approaching 90 percent
        and overall new business up from 22 percent in 2000 to 24 percent in
        the first quarter.
 
     *  On an accident-year basis, the combined ratio was 103, significantly
        improved from 106 in the first quarter of 2000 and 125 in 1999.
 
     *  The expense ratio improved by 3.7 points, down to 30.5.
 
 
     Global Surety
                                                            Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $105.2         $123.0
       Percentage Change from 2000                      (14.5)%
 
     Combined Ratio                                      84.3           80.1
 
 
     *  Global surety continues to deliver outstanding results.
 
     *  The decline in net written premiums reflects the intentional reduction
        of business, which was begun last year in anticipation of an economic
        slowdown.
 
 
     Global Healthcare
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $176.8         $113.0
       Percentage Change from 2000                       56.5%
 
     Combined Ratio                                     170.8          115.4
 
 
     *  Health Care has made significant progress in its Major Accounts
        business (large, complex health care risks in major metropolitan
        areas).  This segment has implemented price increases averaging
        40 percent to 50 percent; product changes, including lower policy
        limits; and higher risk retention requirements.  However, adverse
        development continues on 1998 and 1999 cases.  It is not clear when
        this prior-period drag will end.
 
     *  During an ongoing strategic review of the Health Care segment, the
        company determined that Health Care's Physicians and Surgeons business
        requires significant rate increases that must quickly be implemented to
        keep pace with loss costs.  Unlike Major Accounts, this business
        requires regulatory approval before rate increases can be applied.
        Over the next three months, the company will be approaching regulators
        in key states and requesting the necessary rate increases.  The
        company's position is to achieve the required increases or discontinue
        underwriting the business, and in 2002, be either a large and
        profitable health care insurer, or a small and profitable health care
        insurer.
 
     Other Specialty
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $461.9         $319.0
       Percentage Change from 2000                       44.8%
 
     Combined Ratio                                      98.0          106.0
 
 
     *  The "Other Specialty" segment, accounting for 25 percent of net written
        premiums, is growing at 45 percent as the company takes advantage of
        superior domestic and global positioning in these businesses.  The
        growth also reflects the impact of small acquisitions.  Its combined
        ratio improved by 8 points.
 
     *  Construction net written premiums grew 51 percent over first-quarter
        2000, driven by price increases, stable retentions and an increase in
        new business.  Price increases averaged more than 15 percent during the
        first quarter of 2001, and its accident-year combined ratio improved by
        9 points over the first quarter of 2000.
 
     *  Technology produced good results and grew 51 percent, as the company
        solidified its pre-eminent position in this market.  Prices increased
        by almost 12 percent, generating an accident-year combined ratio just
        under 100.
 
     *  Financial and Professional Services also produced an accident year
        combined ratio under 100.  Net written premiums grew 31 percent, and
        prices increased 9 percent.
 
 
     International
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $153.1          $62.9
       Percentage Change from 2000                      143.4%
 
     Combined Ratio                                     126.0          123.9
 
 
     *  Non-U.S. markets are beginning to experience the turmoil often seen
        during the initial stages of a hardening market.  Insurance companies
        are withdrawing capacity and raising prices.  The St. Paul has obtained
        significant price increases in Latin America, the United Kingdom,
        Ireland, Canada and Australia.
 
     *  The St. Paul's Lloyd's results account for about half the GAAP losses,
        with a combined ratio of 130.9.  However, price increases averaging
        25 percent to 30 percent in the first quarter are expected to continue
        and should significantly improve profitability going forward.  And, the
        actions taken to reorganize and restructure this business over the past
        year should result in improvement by year-end.
 
     *  In addition, over the next 12 months, the company will continue to
        consolidate its Lloyd's operation's back office and staff functions
        into a single, efficient operation to provide better service and
        improve the expense ratio.  The St. Paul Lloyd's operation will
        concentrate on specialty business and eliminate all multi-class, or
        nonspecialty, business across all its syndicates.
 
     *  The company is forecasting a 115 combined ratio for Lloyd's full-year
        2001, with net written premiums of about $500 million.  The first
        quarter represents only 10 percent of the annualized premium.
 
     *  The St. Paul is also determined to rehabilitate problem business in the
        remaining non-Lloyd's, non-U.S. international operations in one year.
        This business -- $55 million of primarily European business -- reported
        a combined ratio of 131 in the first quarter.  If there is any portion
        of those operations that is not profitable, or cannot be made
        profitable in one year, the company will exit from that business.
 
     *  While International growth is expected to slow from its historical
        30 percent to close to zero, profitability is expected to improve
        dramatically over the next six quarters.
 
 
     Reinsurance
                                                             Three Months
                                                            Ended March 31
     (Dollars in millions)                               2001           2000
 
     Net Written Premiums                              $457.7         $390.3
       Percentage Change from 2000                       17.3%
 
     Combined Ratio                                     100.0          114.2
 
 
     *  The Reinsurance combined ratio improved dramatically, to 100 in the
        first quarter. Price increases and underwriting initiatives have been
        successful.
 
     *  There were $41 million in two positive events in the first quarter:
        Reinsurance benefited by $23 million from reinsurance policies when
        some old events were newly designated as catastrophes.  And,
        catastrophe losses in the first quarter were $18 million less than
        anticipated.
 
     *  Partially offsetting these benefits were $28 million in two other
        first-quarter events:  Petrobras losses of $15 million and North
        American casualty reserve increases of $13 million.
 
 
     Life Insurance Financial Summary
 
                                        1Q-2001         1Q-2000
                                              (in millions)
     Revenues                            $212.9          $118.7
     Expenses                            $193.9           $99.7
     After-tax Operating Earnings         $14.3           $14.1
     Total Assets                      $6,818.8        $5,902.0
 
     *  F&G Life continues to have very strong fundamental growth.  Annualized
        sales in the quarter were over two times the comparable period last
        year.
 
     *  Invested assets have continued to grow, up 12 percent since year-end
        2000.
 
     *  Individual life insurance coverage in force was $18.65 billion, up
        9 percent since year-end 2000.
 
     *  Margins have come under pressure due to higher new product development
        and advertising costs in the first quarter.  We remain confident that
        earnings growth will hit our target of 10 percent this year.
 
     Asset Management Financial Summary
                                        1Q-2001         1Q-2000
                                              (in millions)
 
     Revenues                             $86.9           $99.6
     Expenses                             $41.8           $56.7
     St. Paul's Share of
      Income before Taxes                 $34.9           $33.0
     Assets Under Management            $61,289         $59,965
     Share Price                         $54.00          $38.25
 
     *  Nuveen continues its excellent track record and continues to be an
        outstanding investment.
 
     *  Gross sales in the quarter were $3.8 billion -- up 20 percent from the
        year-ago period.
 
     *  Sales of equity and fixed-income retail managed accounts grew
        36 percent to $1.9 billion for the first quarter.
 
     For additional information about The St. Paul's quarterly results,
 including detailed loss and expense ratios, go to the Investor Relations
 section of The St. Paul's Web site, www.stpaul.com .
     The St. Paul Companies, Inc., is headquartered in Saint Paul, Minn., and
 provides commercial property-liability insurance and nonlife reinsurance
 worldwide.  The St. Paul is ranked No. 222 on the Fortune 500 list of largest
 U.S. companies (ranked by 2000 revenue).
 
     Certain statements made by the company in this release may constitute
 forward-looking statements.  Actual results may differ materially from those
 projected in the forward-looking statements.  These forward-looking statements
 involve risks and uncertainties including, but not limited to, the following:
 competitive considerations, including the ability to implement price
 increases; the frequency and severity of catastrophic events; changes in the
 demand for, pricing of, or supply of reinsurance or insurance; increased
 competitive pressure; the loss of significant customers; losses due to foreign
 currency exchange rate fluctuations; general economic conditions, including
 changing interest rates, rates of inflation and the performance of the
 financial markets; judicial decisions and rulings; changes in domestic and
 foreign laws, regulations and taxes; effects of acquisitions and divestitures;
 and various other factors.  We undertake no obligation to release publicly the
 results of any future revisions we may make to forward-looking statements to
 reflect events or circumstances after the date hereof or to reflect the
 occurrence of unanticipated events.
 
     MEDIA CONTACT:  Barbara Reynolds
     U.S. Telephone:  651-310-7399
     E-mail: barbara.reynolds@stpaul.com
 
     INVESTOR CONTACT:  Laura Gagnon
     U.S. Telephone:  651-310-7696
     E-mail: laura.gagnon@stpaul.com
 
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