Travelers announced Wednesday that it will reduce its claims call center operations from four to two locations this year as investments in AI improve operational efficiency.
The comments were made during Travelers’ fourth quarter results briefing, where the company reported higher profits due to higher investment income and lower catastrophe losses.
Travelers is making a $1.5 billion technology investment in 2025 to bring AI across its business, CEO Alan Schnitzer said on a conference call with analysts.
Schnitzer said the insurer has thousands of engineers, data scientists and analysts building AI and other advanced technologies, and already has dozens of generative AI tools in use.
Schnitzer said more than half of all claims are now eligible for straight-through processing, and customers are using straight-through processing about two-thirds of the time. A further 15% of all claims are processed using advanced digital tools, he said.
Last week, Travelers released a natural language-generated AI voice agent that provides initial notification of loss over the phone. “Early customer adoption has exceeded our expectations,” he said.
He said increased efficiency in claims organizations will reduce loss adjustment costs, leading to improved loss ratios. The number of employees at the insurance claims call center has fallen by one-third, Schnitzer said.
Travelers reported fourth-quarter net income of $2.5 billion, a 20% increase compared to the same period in 2024. Net premiums written increased 1.1% to $10.86 billion.
The insurer reported a composite ratio of 80.2% for the quarter, an improvement from 83.2% in 2024. Catastrophe losses totaled $95 million in the quarter, down from $175 million in the year-ago period.
Net investment income increased 10.4% to $1.05 billion.
Travelers reported good reserve development of $321 million in the quarter, of which $205 million was from commercial insurance due to the boom in workers’ compensation, Travelers Chief Financial Officer Dan Frye said., I said this on the phone.
The company’s Business Insurance segment reported a 1.6% increase in net premiums written to $5.51 billion, driven by strong growth in the middle market business. Personal insurance reported an increase of 0.4% to $4.24 billion. Fixed income and specialty insurance reported an increase of 4.2% to $1.1 billion.
Select and select–Greg Tosidlovsky, president of Business Insurance, said the market businesses grew 4% and 3%, respectively, and together account for nearly three-quarters of business insurance premiums..
“Sovereign property premiums declined in the quarter reflecting our disciplined execution in terms of risk selection, pricing and contract terms,” he said.
Tochidlovsky said pricing remains attractive, with an average renewal premium change of 6.1% excluding property allowances.
He said renewal premium changes for commercial multiperil, umbrella and auto insurance increased by double digits.
Jeffrey Klenk, president of fixed income and specialty insurance, said the renewal premium change rate for management liability was 2.8% and the retention rate was 87%.
“We were one of the first carriers to successfully navigate the ongoing soft market conditions and, where necessary, push for price increases to improve product returns,” Klenk said.
Travelers reported full-year net income of $6.29 billion, an increase of 25.8% from 2024. Net premiums written increased 2.4% to $44.39 billion.
The combined ratio in 2025 was 89.9% and 92.5% in 2024.
