Consolidated balance sheets

December 31

The St. Paul Companies  (In thousands)

1998

1997

Assets

Investments:

Fixed maturities

$21,056,259

$20,945,219

Equities

1,258,509

1,052,370

Real estate and mortgage loans

1,507,448

1,626,051

Venture capital

571,340

461,892

Securities lending collateral

1,368,322

515,043

408,890

Other investments

371,526

Short-term investments

982,488

970,568

Total investments

27,115,892

25,980,033

Cash

119,841

113,175

Investment banking inventory securities

106,827

130,203

Reinsurance recoverables:

Unpaid losses

3,977,789

3,839,051

Paid losses

157,484

128,422

Ceded unearned premiums

288,107

376,343

Receivables:

Underwriting premiums

2,152,100

2,213,926

Interest and dividends

361,133

355,970

Other

117,175

104,727

Deferred policy acquisition expenses

878,172

872,460

Deferred income taxes

1,193,292

1,213,790

Office properties and equipment

518,497

602,381

Goodwill

592,057

618,528

Other assets

744,342

809,819

Total Assets

$38,322,708

$37,358,828

Liabilities

Insurance reserves:

Losses and loss adjustment expenses

$18,457,921

$18,153,080

Future policy benefits

4,142,277

3,816,050

Unearned premiums

3,265,762

3,528,234

Total insurance reserves

25,865,960

25,497,364

Debt

1,260,392

1,304,008

Payables:

Reinsurance premiums

291,207

258,495

Income taxes

221,270

303,549

Accrued expenses and other

1,238,139

1,327,549

Securities lending

1,368,322

515,043

938,331

1,041,952

Other liabilities

Total Liabilities

31,183,621

30,247,960

Company-obligated mandatorily redeemable preferred capital securities of subsidiaries or tursts holding solely convertible subordinated debenture of the Companty.

502,700

502,700

Shareholders' Equity

Preferred:

PSOP convertible preferred stock

134,181

137,892

Guaranteed obligation - PSOP

(118,605)

(121,167)

Total Preferred Shareholders' Equity

15,576

16,725

Common:

Common stock

2,127,671

2,057,108

Retained earnings

3,480,057

3,720,140

Guaranteed obligation - ESOP

-

(8,453)

Accumulated other comprehensive income:

Unrealized appreciation of investments

1,027,390

845,811

Unrealized loss on foreign currency translation

(14,307)

(23,163)

Total accumulated other comprehensive income

1,013,083

822,648

Total Common Shareholders' Equity

6,620,811

6,591,443

Total Shareholders' Equity

6,636,387

6,608,168

Total Liabilities, Redeemable Preferred Securities and Shareholders' Equity

$38,322,708

$37,358,828