MINNEAPOLIS - Travelers Property Casualty Corp. is combining with The St. Paul Cos. Inc. in a $16.5 billion stock deal that will create the nation’s second-largest business insurer.
The new company will be known as The St. Paul Travelers Cos. and is expected to have total assets of $107 billion, the companies announced Monday.
The deal mixes Travelers’ strength in general commercial insurance and personal insurance — like home, auto and life insurance — with The St. Paul’s specialty commercial lines of insurance.
The only larger business insurer would be American International Group.
‘‘We are absolutely convinced we are far better together than we ever would be alone,’’ said Jay S. Fishman, the chairman and chief executive of The St. Paul.
The merger comes at a time when the insurance industry is consolidating following several years of heavy claim payouts. Analysts welcomed the deal, saying the companies are a good fit.
‘‘Overall, we view this merger clearly as a good thing if it results in a more efficient company . . . providing better service and more product services,’’ said Robert Rusbuldt, head of the Independent Insurance Agents & Brokers of America.
Fishman, who headed Travelers before joining The St. Paul two years ago, will be chief executive of the combined company, which will be based in St. Paul. Travelers, based in Hartford, Conn., was spun off from financial services giant Citigroup last year.
Travelers’ strength is in commercial lines of insurance, but it also has an extensive line of personal insurance products. The St. Paul got out of that business in 1999 because it wasn’t big enough to compete.