St. Paul Travelers: a Minnesota company with an East Coast brain

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St. Paul Travelers says the big bright sign crowning the St. Paul skyline is not just there for show.
MPR Photo/Annie Baxter

Newspaper headlines offer a glimpse of some of the changes underway at St. Paul Travelers.

Consider some of the following:

"Insurer adding 600 jobs; St. Paul Travelers plans major growth locally," or "Insurer comes through for city."

These aren't headlines from any local papers here in Minnesota. They're from the Hartford Courant in Hartford, Connecticut. That's the home base of Travelers Insurance, which the St. Paul Companies acquired two and half years ago.

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And there are a few big reasons the paper in Hartford is crowing about St. Paul Travelers lately. In addition to adding the 600 new jobs, the company is planning a $67 million expansion of its facilities there.

Job growth at the headquarters in St. Paul is much slower, and Hartford's employee base of 6,000 is already more than twice as big as St. Paul's.

St. Paul Travelers insists it has no plans to move its headquarters, but Bob Isaacson of Minnesota's Department of Employment and Economic Development says Minnesota has a big stake in the question. He says corporate headquarters employ highly skilled, high wage workers who are an asset to the local economy. And he says, a corporate headquarters often helps support other area businesses.

"From a development perspective, headquarters add a lot to our quality of life, in leadership in terms of non profit and charitable organization activities, as well as just enhanced image of a corporate community for other business opportunities and for other people to move here and to work for those corporate headquarters," Isaacson says.

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Insurance broker Dick Devine has collected a number of old logos and symbols from companies like Hartford-based Travelers, which used to use a red umbrella as the logo. Citigroup now owns the rights to the logo.
MPR Photo/Annie Baxter

St. Paul Travelers employs 30,000 people nationwide. The number of jobs in St. Paul and Hartford are peanuts in comparison. Still, employment in Hartford is growing faster than in St. Paul.

Company spokesman Shane Boyd says there's a straightforward explanation for the difference. But he says the company is growing nationwide, and the personal insurance business, the company's biggest growth segment, is based in Hartford, so it's logical to expand there.

But some analysts say there's more to it than that, and they point to the 2004 deal that brought the St. Paul Companies and Travelers together.

"Legally St. Paul bought Travelers, but that's probably not really accurate. Travelers was a significantly bigger company, maybe twice the size," says Paul Newsome, a senior insurance analyst at AG Edwards in St. Louis.

Newsome says by merging, the St. Paul Companies got additional financial strength, and Travelers was able to ditch a complex ownership structure. Even though the St. Paul was officially the buyer, Newsome says Travelers effectively acquired the St. Paul. Company spokesman Shane Boyd disputes that, saying the combination was a merger of equals.

But much of the combined company's senior management team, including CEO Jay Fishman, came from Travelers either before or after the merger. Several industry insiders and insurance analysts MPR contacted for this story say in their experience St. Paul Travelers is run primarily from the East Coast. Paul Newsome's comment is typical.

"The official headquarters is still in St. Paul, and there are still a few folks among the senior management who are there. But it is in large part true that the company is run outside of St. Paul. A number of its senior management is either based in the Hartford or in the New York areas, in New Jersey."

Industry consultant Ira Zuckerman says there are strong bottom line reasons to centralize the management of the company in one location.

The official headquarters is still in St. Paul, and there are still a few folks among the senior management who are there. But it is in large part true that the company's run outside of St. Paul.

"When you have two headquarters, it doesn't work. Eventually you close down one and consolidate it there. It makes communications more difficult if you've got key people segregated, and an hour time difference... It's less efficient," says Zuckerman.

And University of St. Thomas insurance expert Peter Young says the company's business model is moving in a direction that could carry the headquarters with it. He says since the merger, the company has put less emphasis on the St. Paul's traditional products, like specialty insurance for construction or medical malpractice.

"I just think the people at the top of the company really had a very clear idea that the direction they wanted to move into was general insurance, which is a wholly admirable strategy, but it's just not what the St. Paul Companies was. The St. Paul Companies was a specialty lines insurer, for the most part, and that just doesn't square with a strategy to move towards middle markets, more general types of commercial insurance-- and personal lines insurance as well," says Young.

Other moves have prompted questions about whether St. Paul Travelers is de-emphasizing its St. Paul roots. Last June, the company announced it would drop the "St. Paul" part of its name from most of its insurance products, leaving only the "Travelers" brand. The change affects the company's products, but doesn't extend to the corporate identity. You still hear the company's full name in underwriting announcements on Minnesota Public Radio. The St. Paul Companies had been a long-time contributor to MPR, and that continued after the merger.

St. Paul Travelers spokesman Shane Boyd says the omission of "St. Paul" from insurance products is merely a marketing move. And analysts say it made sense to lose the "St. Paul" from the company's products because "Travelers" is more of a household name nationally.

But the Travelers brand also changed over time.

"How many logos and names have they gone through in 10 years? I'd say quite a few," says insurance broker Dick Devine of the Minneapolis-based David Agency, who has an extensive collection of old insurance memorabilia in his office, including old placards from various insurance companies reflecting dozens of name changes, and old logos, like the bright red umbrella that used to be the symbol for Travelers insurance.

"It went from Travelers and the umbrella, then it was Travelers Property Casualty, part of Citigroup, there were four or five names in there, then it merged with St. Paul, and now it's back to Travelers."

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Insurance broker Dick Devine says he's seen countless name and logo changes in the insurance industry in his twenty year tenure. His office is decorated with plaques and pictures commemorating those changes.
MPR Photo/Annie Baxter

Devine is not sentimental about any of it himself, including the loss of the name "St. Paul" from St. Paul Travelers marketing.

And he's not concerned about whether St. Paul Travelers is run from St. Paul or Hartford. He, like several analysts, has the impression that the company's brain trust is in Hartford. But he says that does not impede his day to day operations.

"Rarely do I as an agent have any contact with the office in Hartford, and, in the area of specialty commercial, we have contact with the people in St. Paul because that's where the underwriting staff we work with is. Does it really matter in today's world where some of these people are? Sometimes you don't even know, when you're talking to somebody, where they are or where they aren't."

While Dick Devine sees no need for the company to move the headquarters, Mark Langseth sees no evidence it's moving. He's vice president for university advancement at Metropolitan State University, which received a $90,000 charitable contribution from St. Paul Travelers last year.

"I have not seen any kind of downturn in support or enthusiasm for the Twin Cities. And I will tell you, we are in conversations with them about continued and expanded support and have had very productive conversations."

Even to those who believe the St. Paul Travelers is operating a kind of "decoy" headquarters in St. Paul, it's not clear if the company will ever up and leave altogether. And they're confidant that for the foreseeable future, both jobs and philanthropic support will remain intact. In any case, a headquarters move is the board's decision, and directors who came from the St. Paul Companies currently retain a majority on the board.