A：Travelers reported excellent fourth quarter and full year 2025 results, with strong and broad-based writing and investment performance across both periods. Key highlights include very strong underwriting income, a core return on equity of 29.6%, and a core income of $2.5 billion or $11.13 per diluted share. Underwriting income pre-tax increased 21% to $2.2 billion, driven by higher underlying underwriting income, favorable prior year reserve development, and lower catastrophe losses. Net earned premiums were strong, and the line combined ratio improved to 82.2%. The company returned $1.4 billion of capital to shareholders through share repurchases while maintaining a strong balance sheet. Additionally, the top line grew with disciplined marketplace execution, leading to net written premiums of $10.9 billion in the quarter.

A：Travelers' high-quality investment portfolio performed well, generating after-tax net investment income of $867 million for the quarter, up 10% from the prior year. This performance was attributed to strong and reliable returns from the growing fixed income portfolio.

A：Travelers grew net written premiums to $10.9 billion in the fourth quarter. In business insurance, net written premiums were $5.5 billion, excluding the property line. Domestic net written premiums in the business insurance segment grew, aided by disciplined risk selection, pricing, terms, and conditions renewal. Premium change in business insurance was 6.1%, with double-digit renewal premium changes in auto, commercial property, and umbrella, excluding the property line renewal. In bond and specialty insurance, net written premiums reached $1.1 billion with excellent retention and positive renewal premium change in high-quality management liability business. Personal insurance had net written premiums of $4.2 billion, bolstered by strong homeowners premium change and new business in auto.

A：Travelers' innovation strategy, which began a decade ago, has positioned the company to grow at industry-leading returns with low volatility. Over this period, the company has maintained a compound annual growth rate of 7% in top line while improving underlying profitability significantly. The strategy has led to a more than fourfold improvement in underlying underwriting income and a doubling of cash flow from operations. The investment portfolio has grown by 50% to over $100 billion, and core return on equity has averaged over 1,200 basis points over the 10-year period, with industry low volatility and average earnings per share growth. The execution of the strategy has been exceptional, which reflects the success of Innovation 1.0.

A：AI is anticipated to play a significant role in Travelers' future, as part of the company's 'Innovation 2.0' strategy. The company is leveraging AI and, in the near future, quantum computing to benefit from advancements across the insurance industry. Travelers is well-positioned due to its competitive advantage in innovation and domain expertise, which is further amplified by AI. With the help of AI, the company aims to improve operations across various business functions such as product development, new business prospecting, underwriting speed and quality, and customer and agent service. Travelers has made substantial progress in embedding AI into business operations, with thousands of engineers, data scientists, and analysts working on developing AI solutions.

A：Travelers announced a partnership with Anthropic last week to empower its engineers, scientists, analysts, and product owners with personalized, context-aware, and integrated AI assistants. The goal of this initiative is to enhance and accelerate the development of software analytics and predictive models. Initial tests have shown significantly improved engineering output and productivity gains. Travelers expects that this will result in faster and more cost-effective delivery of new capabilities across the company.

A：In Travelers' claim organization, AI is being utilized to facilitate straight-through processing for more than half of all claims, with customers adopting this method two-thirds of the time. Another 15% of claims are processed with advanced digital tools. Investments in automation, analytics, and operational efficiencies have been made to support customers who prefer to report claims by phone. These efforts have led to tangible results, such as a one-third reduction in the claim call center population and the consolidation of claim centers. AI is also being broadly deployed across the business to enhance underwriting decision quality, efficiency, and the customer experience.

A：The transformation initiatives at Travelers have led to effective underwriting, improved operating leverage, and profitable growth. The full year core income grew by 26% to $6.3 billion, or $27.59 per diluted share, with a core return on equity of 19.4%. Adjusted book value per share grew by 14% as the company returned $4.2 billion of capital to shareholders and invested in cutting-edge AI and technology initiatives. Despite elevated catastrophe losses, Travelers remained operationally and financially successful, underlining its strong underlying business performance.

A：Travelers handled a million and a half claims in 2022, paying out more than $20 billion in claim payments. The company met its objective of closing claims arising from catastrophes within 15 days. Going forward, Travelers intends to continue generating substantial shareholder value, supported by the durability of its strong underlying business performance. This foundation is expected to result in continued strong bottom-line results, leading returns, and robust cash flows. With this outlook, the company remains highly confident in its future performance.

A：The after-tax underlying underwriting income grew by 23% compared to the prior year.

A：The fourth quarter expense ratio was 28.5%, and it was expected that the 2026 expense ratio would be around 28.5%.

A：Catastrophe losses in the quarter were $95 million pre-tax, while there was total net favorable development of $321 million pre-tax in the quarter, with all three segments contributing.

A：The expected fixed income NII for the upcoming year is about $3.3 billion after tax, beginning with about $800 million in the first quarter and growing to about $870 million in the fourth quarter.

A：The January 1st catastrophe reinsurance renewal provided coverage with a per occurrence loss deductible unchanged at $100 million and a drop in the attachment point to $1 billion compared to the previous year. The plan was seen as more efficient and allowed for improved coverage with a modest increase in total ceded premium costs.

A：Interest rates decreased during the quarter, resulting in a decrease in net unrealized investment losses from $2 billion after tax at September to $1.2 billion after tax at December.

A：In the quarter, $1.5 billion of capital was returned to shareholders through share purchases of $1.2 billion and dividends of $244 million. It is expected that repurchases of around $1.8 billion will occur in the second quarter, pending various factors.

A：The company has become more likely to issue debt every year, assuming market conditions are comfortable, instead of its historical practice of issuing debt every other year. This is to maintain a more consistent debt to capital ratio.

A：Business Insurance had a strong fourth quarter with segment income of nearly $1.5 billion, a more than $100 million improvement from the prior year. This was driven by higher net investment income, favorable reserve development, and a lower combined ratio of 84.4%.

A：The top-line performance was robust with net written premiums reaching an all-time fourth quarter high of more than $5.5 billion. The leading select and middle market businesses grew by 4% and 3% respectively. Excluding property, domestic net written premiums were up 4%, reflecting disciplined execution in terms of risk selection, pricing, and terms.

A：Strategic initiatives contributing to success include decision support tools for underwriters, product enhancements, and a focus on profitable growth. The new Bop product and new auto product have been well-received and include industry-leading segmentation. Insights from submissions have also allowed underwriters to focus on new business opportunities. The progress with Jana AI and Gen AI agents have improved risk assessment and classification, resulting in better risk profile and segmented pricing.

A：The financial performance highlighted for 2025 includes strong results across various segments, with segment income of $236 million and a combined ratio of Ly. The strategic investments mentioned involve future plans for industry transformation, the best people in the business who are executing in the market, and a focus on profitable growth.

A：The specialty and management liability business experienced a 2.8% renewal premium change while retention remained strong at Ed. Growth was also supported by the absence of new business impacts from the Corvus acquisition in the final quarter of the year.

A：The surety business saw solid growth by capitalizing on leading expertise and premier value-added service offerings. New and expanded distribution arrangements were entered into both domestically and internationally, and the operation in Canada was integrated to maintain the position as the leading surety in North America. Investments in AI were made to improve distribution, submission, and fulfillment efficiencies.

A：Personal insurance generated segment income of over a billion dollars with a combined ratio of Ed. The segment's results for the fourth quarter and the full year showed an improvement compared to the prior year, with net written premiums comparable or increased despite losses from wildfires. Auto net written premiums grew 2% to a record $17.4 billion, and the fourth quarter combined ratio was Ed, reflecting a strong underlying ratio and favorable net prior year development.

A：The underlying combined ratio of 92.2% for auto improved by just over four points, homeowners and other experienced a ratio of 59.9% which improved by 5.5 points, and the property combined ratio of 93% was a notable improvement compared to the prior year. These improvements were attributed to various factors including favorable frequency, severity, and loss development.

A：The key factors contributing to the improved property combined ratio included continued favorable frequency across coverages, moderation in severity, and the impact of actions taken to manage exposures in high catastrophe risk geographies. Additionally, there was a positive effect from reduced local market aggregations of exposure.

A：The renewal premium change in the auto insurance segment was 2.2%, with new business premium up year over year in states less impacted by property actions. Homeowners retention remained consistent at 84%, while auto renewal premium change remained strong at Ed Ed. The new business premium and policies in force declined compared to the prior year.

A：The impact of the company's actions to reposition its portfolio has been to reduce property policies in force by a significant amount, especially from high-catastrophe risk geographies. This repositioning demonstrates disciplined risk selection, actions to manage volatility, and improved portfolio balance between auto and property risks.

A：The company's investment in technology and AI has made the renewal underwriting process more effective and efficient. Using a proprietary AI-enabled predictive model, the process scores every account in the property portfolio and directs underwriters to review those with the highest probable loss risk. Early results have shown more than a script reduction in average handle time, enabling underwriters to focus on decisions likely to improve profitability.

A：The planned loss ratio for 2026 includes an uncertainty provision in the casualty space to address the potential for loss due to the nature of the business, particularly in long-tail lines.

A：There is no expected pressure on the first quarter combined ratio components due to lowering the catastrophe reinsurance attachment point as the reinsurance program's design, pricing dynamics, and other marginal changes are not anticipated to have a significant impact.

A：The company's growth policy implies that growth in property P&C will continue to trail auto but should improve in both lines. However, there are still some areas where growth will be constrained, meaning aggregate property P&C growth will continue to trail auto.

A：The company is always looking for M&A opportunities and has the capital and expertise to diligence, find, and execute deals. However, this stance has not changed over the last decade, indicating a consistent strategy towards inorganic growth.

A：The impact of tariffs on personal auto insurance has so far been relatively mild and was expected to be modest. Provisions and loss picks have been made for potentially impacted lines, and these provisions are believed to cover the current situation. However, the dynamic could change as the world adjusts to the presence of tariffs for an extended period.

A：The company's competitive advantages in the personal auto insurance market include its strategy as an independent carrier, choice and advice for customers, strong and durable relationships with independent agents, investments in digitization, ease of doing business, and a packaged value proposition for both agents and customers, including balance sheet protection for consumers.

A：The company views policy count trends positively, with the business now being higher than it was five years ago despite seeing policy count decline over the years. The focus is on the right balance of returns and sustainable growth over time rather than short-term growth numbers.

A：The tort environment continues to be very challenging, with no clear signs of improvement. However, there is a potential positive development in that more states are reacting to a difficult tort environment and taking action to address the impact of tort costs on affordability for businesses and consumers. Additionally, there is an increase in disclosure requirements for third-party litigation financing, which is also beneficial.