Travelers Announces Establishment of Catastrophe Bond Program and Successful Completion of $500 Million Offering of Catastrophe Bonds

Business Wire, May 8, 2007

SAINT PAUL, Minn. -- The Travelers Companies, Inc. (NYSE:TRV) today announced the establishment of a multi-year catastrophe bond program. The program was established by Travelers to provide reinsurance protection for its insurance subsidiaries for losses resulting from hurricanes and certain other catastrophes in the United States. Travelers may obtain reinsurance under the program by entering into one or more reinsurance agreements with Longpoint Re Ltd. ("Longpoint Re"), a newly formed independent Cayman Islands insurance company.

Longpoint Re successfully completed an offering to unrelated investors under the program of $500 million aggregate principal amount of catastrophe bonds on May 8, 2007. In connection with the offering, Travelers and Longpoint Re entered into a three-year reinsurance agreement providing up to $500 million of reinsurance from losses resulting from certain hurricane events in the northeastern United States.

Amounts payable under the reinsurance agreement will be based on an index created by applying predetermined percentages to insured industry losses in each state in the covered area as reported by Property Claim Services ("PCS"), a division of Insurance Services Offices, Inc. Payments to Travelers under the reinsurance agreement will be based on index-based losses, which are designed to approximate Travelers' actual losses from any covered event. The principal amount of the catastrophe bonds will be reduced by any amounts paid to Travelers under the reinsurance agreement.

Travelers will be entitled to begin recovering amounts under the reinsurance agreement if the index-based losses in the covered area for a single occurrence reach an initial trigger amount of $2.25 billion. The full coverage amount of $500 million is available on a proportional basis until index-based losses reach an initial exhaustion amount of $3.0 billion. The trigger and exhaustion amounts will be reset annually to maintain a probability of loss on the catastrophe bonds equal to the initial modeled probability of loss.

Travelers is a leading provider of property casualty insurance. For more information, visit www.travelers.com.

This is not an offer to sell or a solicitation of offers to buy any securities. The catastrophe bonds sold by Longpoint Re Ltd. have not been registered under the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, or any state or foreign securities laws and, accordingly, may be offered or sold, or resold, only in transactions exempt from registration to qualified buyers that are residents of, purchasing in, and will hold the securities in, permitted U.S. jurisdictions or permitted non-U.S. jurisdictions.