2006 National Homeowners Insurance StudySM Presented to: St. Paul Travelers December 6, 2006

Today’s Program Agenda Overview and Key Findings Overall Satisfaction Performance Satisfaction vs. Key Competitors Detailed Findings Interaction Price Policy Offerings Billing and Payment Claims Closing Remarks and Recommendations

The Customer Experience Model The 5 P’s of the customer experience People Presentation Price Product Process Gary First we must understand that each company creates a unique customer experience through a set of five inter-related aspects of their business systems (business and operational models)

Index Framework

Customer Satisfaction Varies by Industry Experiences from one Industry influence customer expectations for other industries Gary

Key Findings

Key Findings Travelers ranks in the lower tier of customer satisfaction with an overall CSI score of 739, twenty two points below the industry average. Within its competitive set, Travelers is comparable to Liberty Mutual. However, it trails Erie, The Hartford, and Safeco by a significant margin. Travelers is among a handful of insurers who enjoy an improved performance. In 2006, it has nearly halved its gap with the industry average. Relative performance improved across the board especially for the Policy Offerings, Billing/Payment, and Price factors. Gains made in Interaction (Agent involvement ) in the 2006 Auto Study also registered for Home. Compared to its key competitors, Travelers has the biggest opportunity for improvement in two areas that have an impact on the customer experience: Interaction – Customers desire better service from agents and better response time Policy Offerings – Customers desire a wider variety of coverage options and more competitive discounts Price, Billing, & Payment as well as Claims all have components needing addressing as well

Overall Satisfaction Performance

Overall Customer Satisfaction Index (CSI) Ranking Difference from 2005 (22) 15 (19) (17) 9 17 (4) 7 (10) (11) (15) (3) (6) 12 Overall Customer Satisfaction Index Score

Overall Customer Satisfaction Index (CSI) Ranking Excluding Gulf CAT States

Customer Satisfaction Index Models 89% 11%

Customer Satisfaction Index Model - Combined

Overall CSI Index Trend Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Satisfaction Performance vs. Key Competitors

St. Paul Travelers vs. Industry Gap Point Analysis

St. Paul Travelers vs. State Farm Gap Point Analysis

St. Paul Travelers vs. Safeco Gap Point Analysis

St. Paul Travelers vs. The Hartford Gap Point Analysis

St. Paul Travelers vs. Allstate Gap Point Analysis

St. Paul Travelers vs. Liberty Mutual Gap Point Analysis

St. Paul Travelers vs. Encompass Gap Point Analysis

Interaction

Interaction Index Trend Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Customer Satisfaction Index Model - Combined

Local Agent and/or Staff Index % Utilization 80% 44% 85% 84% 86% 72% 78% 76% 75% 58% 64% 57% 38% 71% 70% 60% 21% ‡ USAA is not ranked because it is not generally open for the public to purchase. *Caution small sample size

Call Center Service Representative Index % Utilization 71% 58% 49% 26% 27% 55% 53% 34% 31% 39% 47% 54% 20% 36% 29% 32% 88% 17% ‡ USAA is not ranked because it is not generally open for the public to purchase. *Caution small sample size

Method of Contact and Satisfaction with Overall Interaction (Agent Distribution) % Using Interaction Method

Method of Contact and Satisfaction with Overall Interaction (Direct Distribution) % Using Interaction Method

Customer Satisfaction by Agent Type

Problem Mitigation KPI Problem Mitigation KPI** - Nature of Most Recent Non-Claim Related Interaction (Multiple Mention) Breakpoint % of Total Customers **Key Performance Indicator

Reason for Contacting With a Problem - Industry Problems Reason for Most Recent Contact

% of Customers Contacting Insurer Issue Resolution KPI** Performance - Number of Contacts to Resolve Issue Breakpoint % of Customers Contacting Insurer **Key Performance Indicator # of Contacts Made to Insurer

Issue Resolution KPI** Performance- Time to Resolve Breakpoint % of Customers Contacting Insurer **Key Performance Indicator # of Days to Resolve Issue

Issue Resolution KPI** Performance – Call Back Fulfillment Breakpoint % Contacting Insurer **Key Performance Indicator

Issue Resolution KPI** Performance – Policy Review Breakpoint % of Total Respondents Index Score **Key Performance Indicator

Overall Interaction Index Recency of Interaction KPI** Performance Breakpoint N/A % Contacting Insurer Overall Interaction Index Timeframe of Last Contact **Key Performance Indicator

Price

Price Index Trend Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Price Sensitivity by Insurer Note: Values may not total 100% due to rounding.

Influence of Price on Purchase Decision Note: Values may not total 100% due to rounding.

Premium Change Notification and Discussion KPI** Performance Breakpoint % of Total Customers **Key Performance Indicator

Notification of Rate Increase Note: Values may not total 100% due to rounding.

Policy Offerings

Policy Offerings Index Trend Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Policy Offerings Attributes Importance: 15% 19% 21% 14% 13% 19% Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Discounts Received 828 778 764 771 756 613 Policy Offerings Index Score 828 778 764 771 756 613

Bundling Home and Auto Insurance KPI** Performance Breakpoint % of Total Customers **Key Performance Indicator

Bundling Home and Auto Insurance By Insurer

Recency of Replacement Cost Value Calculation KPI** Performance Breakpoint % of Total Customers **Key Performance Indicator

Recency of RCV Calculation - By Insurer

Reporting Structural Changes to the Insurer KPI** Performance Breakpoint % of Total Customers Index Scores Yes, made structural change to home % Received a PIR 64% 79% 59% **Key Performance Indicator

Reporting Structural Changes – By Insurer

Limits to Coverage (Self Reported) % of Total Customers Index Scores When Coverage Was Last Calculated % Received a PIR 69% 77%

Coverage Shortfall (Self Reported) - By Insurer

Billing and Payment

Billing and Payment Index Trend Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Billing and Payment Attributes Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Customer Satisfaction with Billing Contacts - Industry Index Score % Of Total Customers 87% 9% 2% 1%

Incidence of Billing Contacts

Customer Satisfaction with the Method of Payment % Using Payment Method Values may not total 100% due to rounding.

Claims

2006 Claims Index

Claims Index Trend - Industry Key Competitors: Erie, Hartford, Liberty Mutual, Safeco Captives: Allstate, American Family, Farmers, Nationwide, State Farm

Most Recent Claim Filed With St. Paul Travelers Within Last 12 Months 13-36 Months Ago 752 762 Industry Overall CSI Index Scores More Than 36 Months Ago 785 Never 755

Type of Most Recent Claim (Multiple Mention) % Claimants

Primary Claims Contact KPI** Performance Breakpoint % of Claimants Overall Claims Index **Key Performance Indicator *Caution small sample size.

Claims Response Time KPI** Performance Breakpoint % of Claimants Overall Claims Index **Key Performance Indicator

Claims Response Time – By Insurer **Key Performance Indicator *Caution small sample size Note: Values may not total 100% due to rounding.

Claim Incident Required a Call Back KPI** Performance Breakpoint % of Claimants Overall Claims Index **Key Performance Indicator

Claim Incident Required Call Back – By Insurer

Damage Inspection KPI** Performance Breakpoint % of Claimants Overall Claims Index **Key Performance Indicator

Damage Inspection – By Insurer **Key Performance Indicator Benchmark carriers limited due to small sample.

Settlement Time KPI** Performance Breakpoint % of Claimants Index Score **Key Performance Indicator *Caution small sample size.

Settlement Explanation KPI** Performance Breakpoint % of Claimants Overall Claims Index **Key Performance Indicator

Shopping

Products/Services Desired – Home Industry Overall

Leading Reasons for Selecting Insurer

Recommendations

Recommendations (for Task Force to consider) Interaction Empower agents to deliver world class service to Travelers customers Encourage agents and service representatives to resolve customer problems and concerns the same day registered and on the same call (One and Done) Encourage greater participation of agents in the claims process Encourage agents to perform annual policy reviews, RCV and coverage shortfall Notify customers of premium increases prior to bill and discuss coverage options Policy Offerings Bundle home insurance with auto policy and other products Increase the variety of coverage options offered Offer more and increase awareness of policy discounts (e.g. loyalty/renewal discounts)

Recommendations (for Task Force to consider) Billing & Payment Minimize billing confusion by educating customers on the process at the time of the enrollment Get billing clear and concise to eliminate call and confusing customers Work to improve the accuracy and clarity of billing statements Encourage on-line or automatic payments Claim Work to contact more claimants the same day as the FNOL and tighten claim cycle-time For claims interaction, respond to the FNOL within one day and include the agent in the process. Inspect damage within 14 days For claims settlement, settle claims within three weeks and provide claimants with a detailed settlement explanation