Shortly after announcing a plan to provide 10,000 engineers and data scientists with AI assistants, Travelers’ top executive highlighted the insurer’s deep expertise in data and technology as key drivers of sustained profitability. He also pointed to growing automation in claims operations, including a smaller footprint for claims call centers.

During a fourth-quarter 2025 earnings call, Travelers Chief Executive Officer Alan Schnitzer told analysts that over 20,000 employees across the company are already “using AI tools regularly.” He added that automation has allowed the company to reduce staffing in its claims call centers, improving efficiency.

After reviewing results that included a 20% increase in fourth-quarter net income and a 26% rise for the full year, Schnitzer reflected on a decade-long period of profit growth driven by investments in technology and innovation. This discussion came before he referenced Travelers’ new partnership with Anthropic, which will introduce 10,000 customized AI agents to strengthen the company’s AI-powered engineering and analytics capabilities.

A Decade of Technology-Driven Profit Growth

Schnitzer explained that between 2016 and 2025, net written premiums grew by an average of nearly 7% per year. Over the same period, the underlying combined ratio—excluding catastrophe losses and prior-year reserve development—improved by almost eight points, falling to 83.9.

Despite significantly increasing spending on technology, Travelers achieved a three-point, or roughly 10%, improvement in its expense ratio, Schnitzer said. He later disclosed that the company invested a total of $1.5 billion in AI and other technology initiatives. Presentation slides showed the expense ratio declining from 31.5 in 2016 to 28.5 in 2025.

“As a result,” Schnitzer noted, “our underlying underwriting income today is more than four times what it was a decade ago.”

Automation Reshapes Claims Operations

As a concrete example of efficiency gains, Schnitzer said Travelers has reduced its claims call center workforce by about one-third and plans to consolidate four claims call centers into two this year.

He emphasized that efficiencies in claims operations primarily reduce loss adjustment expenses, which directly improve the loss ratio. These gains stem from investments in automation, straight-through processing, and analytics that help fine-tune indemnity payments and streamline operations.

More than half of all Travelers claims are now eligible for straight-through processing, Schnitzer said, and customers choose this option about two-thirds of the time. An additional 15% of claims are handled using advanced digital tools, and all of these proportions are continuing to rise.

While many customers still prefer to report claims by phone, Travelers recently launched a generative AI voice agent that uses natural language processing to handle first notice of loss calls. According to Schnitzer, early customer adoption has exceeded expectations.

In 2025 alone, Travelers handled 1.5 million claims—roughly one every 20 seconds—paid out more than $23 billion, and met its goal of closing 90% of catastrophe-related claims within 30 days.

AI Beyond the Call Center

Schnitzer stressed that AI and automation benefits extend far beyond claims call centers. He said these technologies also improve underwriting decisions, operational efficiency, and the overall experience for customers, agents, brokers, and employees.

Later in the call, the presidents of Travelers Business Insurance, Bond & Specialty Insurance, and Personal Insurance—Greg Toczydlowski, Jeffrey Klenk, and Michael Klein—shared specific examples from their respective segments.

Toczydlowski described recently deployed generative AI agents that rapidly analyze internal and external data to ensure risks are classified correctly and risk characteristics are better understood. He said these tools speed up underwriting and lead to more precise, segmented pricing.

In Personal Insurance, Klein explained how AI supports renewal underwriting. A proprietary AI-based predictive model scores every property account, flagging those with the highest likelihood of loss for underwriter review. Generative AI then compiles and summarizes relevant data so underwriters can focus on key decisions.

Early results show a 30% reduction in average handle time, Klein said. “The result is that underwriters spend more time on the decisions that most directly improve profitability, and they do so more efficiently.”

For Specialty Insurance, Klenk highlighted AI investments that automate new business intake, reducing submission processing time from hours to minutes. These capabilities have recently been expanded to renewals as well.

Moving From Innovation 1.0 to Innovation 2.0

Toczydlowski noted that commercial underwriters are supported by decision tools at the point of sale, including models that assess risk characteristics, refine pricing, and summarize historical loss experience. These tools help improve risk selection, pricing accuracy, and policy terms.

“They’re excelling in today’s market and also helping drive the industry’s transformation,” he said.

During the Q&A portion of the call, an analyst asked Schnitzer how AI might affect Travelers’ workforce size. Schnitzer declined to offer headcount projections beyond the claims call center example, but said productivity gains are already evident.

“Premium per employee has increased due to productivity and efficiency initiatives, and we expect that trend to continue,” he said.

Reflecting on Travelers’ long-term strategy, Schnitzer said the past decade was shaped by “Innovation 1.0,” which focused on prioritizing the right initiatives, executing effectively, and capturing the value created.

“Over that period, we built a competitive advantage in innovation,” he said. “Now we’re applying that expertise to Innovation 2.0—powered by AI, and eventually quantum computing.”

Why Travelers Believes It Has an Edge

Schnitzer argued that the property and casualty insurance industry is especially well suited for AI, given its complex stakeholder interactions, structured processes, data-heavy workflows, and vast amounts of unstructured information.

Travelers, he said, is particularly well positioned because of its deep domain expertise, high-quality data accumulated over decades, and scale, which allows for significant investment in advanced technology.

“We have thousands of engineers, data scientists, and analysts building AI solutions,” Schnitzer said. “Dozens of generative AI tools are already in production, millions of transactions are automated, and agentic AI is already embedded in our operations.”

He added that testing with Anthropic showed meaningful productivity gains and improved engineering output. Travelers expects these tools to accelerate and lower the cost of delivering new capabilities across product development, underwriting, customer and agent service, and business prospecting.

Financial Performance and Segment Highlights

Much of the earnings call focused on fourth-quarter and full-year 2025 performance. Executives cited higher underlying underwriting income, favorable prior-year reserve development, lower catastrophe losses in the fourth quarter, and increased net investment income.

After-tax underwriting income rose 22% in the fourth quarter to $1.7 billion and increased more than 40% for the year to $3.4 billion. Personal Insurance played a major role, with underwriting profit more than doubling for the year.

Favorable prior-year development totaled $815 million for 2025, reducing the reported full-year combined ratio by 2.4 points to 80.2. Catastrophe losses were lower in the fourth quarter compared with the prior year but higher for the full year. Net investment income grew 10% in both the quarter and the full year.

Across underwriting segments, premium growth was in the single digits year over year, though Personal Insurance posted a slight net premium decline in the fourth quarter. Schnitzer noted that the $4.2 billion in personal insurance premiums written during the quarter reflected strong homeowners renewal pricing and increased new auto business.

Presentation materials showed homeowners renewal premium increases of 16.7% in the fourth quarter, compared with 2.2% for personal auto. Despite $310 million in new auto business, in-force auto policies declined 3% year over year, while homeowners policies fell 6%.

The personal auto combined ratio improved nearly five points year over year in the fourth quarter, while the homeowners combined ratio reached 60.0, bringing the overall personal lines combined ratio to 74.0. For the full year, personal auto improved by 9.3 points to 85.7, and homeowners improved by 6.0 points to 67.6.

Klein said these results reflect disciplined pricing, risk selection, and a diversified portfolio. He explained that Travelers intentionally reduced exposure in high-catastrophe areas to improve profitability and manage volatility. In 2026, the company plans to ease some prior restrictions on homeowners business while maintaining progress by supporting package policies.

Additional Developments

Executives also addressed regulatory concerns, property market conditions, and reinsurance. Schnitzer emphasized that Travelers’ profitability must be viewed over time, noting that recent underwriting gains followed earlier periods of combined ratios above 100.

In Business Insurance, premium growth was dampened by declining property premiums in large accounts. Excluding property, commercial premiums grew 4%. Renewal premium change excluding national accounts reached 6.1%, with several lines showing double-digit increases.

Travelers also renewed its property catastrophe excess-of-loss reinsurance program effective January 1, lowering the attachment point from $4 billion to $3 billion.

Finally, Chief Financial Officer Dan Frey confirmed that loss reserves for casualty business include a provision for uncertainty in the 2025 accident year, a practice expected to continue into 2026.