In mid-January, insurance company Travelers announced a new deal to provide AI assistants to 10,000 engineers and data scientists. But less than two weeks later, Travelers executives explained that they believe the company’s true competitive advantage lies in its expertise, not just AI, and that it will drive long-term profit growth.
Alan Schnitzer, Travelers’ chief executive officer, said the company’s more than 20,000 professionals currently “use AI tools on a regular basis.” He also commented on the company’s claims that AI has improved the efficiency of Travelers’ call centers, leading to reduced headcount in claims call centers.
AI technology and innovation drive growth
Schnitzer said Travelers’ net income increased primarily due to the company’s focused technology and innovation strategy. From 2016 to 2025, Travelers reported an average annual increase of nearly 7% in the total value of policies sold. The company’s underlying combined ratio improved by almost eight points, dropping to 83.9.
Schnitzer explained that significant investments in technology have been matched by improved profits. “Despite increased technology spending, fundamental profitability improvements include a 3-point or 10% improvement in expense ratios. Over a decade, we have developed a competitive advantage with our innovation skillset. We are now bringing all of our Part 1 know-how to AI-powered Traveler Innovation 2.0. Quantum computing is also not far away.”
Innovation 1.0 relates to the company’s strategy and foundation for this success, and the company has plans to move to a more advanced stage called Innovation 2.0, where AI will be a central driver.
Automation is equivalent to weeding out call centers
Schnitzer points out that automation has directly reduced staffing needs and improved claims efficiency, as evidenced by recent numbers. For example, Schnitzer said Travelers’ “claims call center population is down by one-third” and that the company is taking steps to consolidate its four claims call centers into two.
These efficiency gains reduced loss adjustment expenses and improved the company’s loss ratio. Ultimately, investments in automation and analytics have allowed travelers to “improve compensation payments and increase operational efficiency.”
Schnitzer said more than 50% of all claims made to travelers are subject to straight-through processing, and customers employ this process in about two-thirds of cases. He went on to say, “Another 15% of all claims are processed with advanced digital tools, and all of those percentages are increasing.”
The CEO said some customers still prefer to call the company to report or discuss claims, even though automated tools are handling the bulk of the claims work. Therefore, Travelers set up an advanced natural language-generating AI voice agent to handle the first call.
Schnitzer congratulated the voice agent on its success, saying, “Early customer adoption has exceeded our expectations.”
Reimagining Traveler operations with AI and automation
According to Schnitzer, the benefits of AI and automation extend far beyond insurance claims call centers. “Other use cases include improving the quality and efficiency of underwriting decisions and improving the experience for customers, agents, brokers, and employees.”
Greg Tosidlovsky, Executive Vice President and President of Business Insurance at Travelers, spoke about how Gen AI agents have been used to “efficiently mine” internal and external data sources. These will help the company “better understand and integrate its risk profile.” Toczydlowski added that recent agent additions have sped up the underwriting process and improved disaggregated pricing.
He discussed how the company’s commercial underwriters’ performance is enhanced by advanced tools used in risk assessment. The tool includes models that adjust pricing, summarize historical billing data, and streamline the entire process.
“Not only are they outperforming in today’s market, they are also helping shape the transformation of our industry,” Toczydlowski said.
Michael Klein, executive vice president and president of personal insurance at Travelers, emphasized the importance of AI in personal insurance, saying it is being used to make renewal underwriting “more effective and efficient.”
Klein said, “We start with a proprietary AI-enabled predictive model that scores every account in a real estate portfolio. Based on this score, the accounts with the highest potential for loss are presented to underwriters for review. From there, our renewal underwriting platform uses generative AI to integrate the data and create a summary of relevant and actionable information that underwriters can evaluate.”
As a result, average processing time has been reduced by 30%, Klein said. Therefore, “the end result is that our underwriters focus their efforts on decisions that are most likely to improve profitability and execute them more efficiently.”
In specialty insurance, Jeffrey Klenk, president of fixed income and specialty insurance at Travelers, commented on how AI has reduced application processing times “from hours to just minutes.” He also said that AI was recently introduced to streamline updates.
Innovation 2.0 – How AI will impact employment
Although insurance claims call center staffing has already been reduced, Schnitzer did not speculate on further cuts. Instead, it highlighted the productivity gains that AI has brought to travelers. “What I’m saying is that because of our productivity and efficiency efforts, we’re increasing the number of employees per employee, and we expect the number of employees per employee to continue to increase.”
Schnitzer said Travelers’ Innovation 1.0 strategy has been a key driver of the company’s 10 years of strong profits. For 10 years, we have developed a competitive advantage through our innovation skillset. Now, we are bringing all the know-how from Part 1 to Traveler Innovation 2.0, powered by AI, which is not far from quantum computing. ”
He believes that AI will benefit the entire P/C environment, highlighting how recent advanced AI tools can “understand and act on complex stakeholder interactions, well-defined processes, data-intensive workflows, and large amounts of unstructured data.”
Schnitzer said human expertise in AI will “enhance existing strengths” and that Travelers is investing heavily in “AI and other advanced technology solutions.” He said, “Dozens of enhanced generative AI tools are already in operation. Millions of transactions are automated today…and agent AI is not a future aspiration. It is built into our business operations today.”
AI and automation technologies are poised to transform the insurance industry tenfold. Travelers expects such technology will “enable us to deliver new capabilities more quickly and cost-effectively.”
From product development to new business prospects, underwriting speed and quality, agent and customer service, and more, AI is benefiting travelers, their customers, and distribution partners, and we’re seeing this technology have a profound impact on business and the industry.
(Image source: “GOES Satellites Capture Holiday Weather Travel Conditions” by NASA Goddard Photo and Video is licensed under CC BY 2.0.)
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