Mid-January saw insurance company, Travelers, announce a new deal that empowers 10,000 engineers and data scientists with AI assistants. However, less than two weeks on, Travelers’ leadership explained that the company’s true competitive advantage lies in expertise, not AIs alone, believing this is what will drive longer-term profit growth.
According to Travelers’ chief executive officer Alan Schnitzer, over 20,000 professionals at the company currently “use AI tools regularly.” He also commented on company claims that Travelers’ call centres are experiencing a boost in efficiency at the hands of AI, leading to claims call centre cuts.
AI technology and innovation driving growth
Travelers’ net profit has increased, according to Schnitzer, largely fuelled by the company’s intensive technology and innovation strategy. Travelers reportedly increased its total value of insurance policies it sold by nearly 7% a year on average between 2016 and 2025. Its underlying combined ratio improved by almost eight points, falling to 83.9.
Schnitzer explained that heavy investment in technology has coincided with improved profits. “Notwithstanding a increase in our technology spending, that improvement in underlying profitability includes a 3-point or 10% improvement in our expense ratio. Over the decade, we developed the competitive advantage of an innovation skill set. Now we’re bringing all that Part 1 know-how to Innovation 2.0 at Travelers, powered by AI – and not too far off quantum computing.”
Innovation 1.0 relates to the company’s strategy and foundation to this success, and it has plans to move into a more advanced stage it’s calling Innovation 2.0, in which AI is the central driver.
Automation equals call centre culls
Schnitzer noted how automation has directly reduced staffing needs and improved claims efficiency, something clearly seen in recent numbers. For instance, Schnitzer said that Travelers’ “claim call centre population is down by a third,” and steps are being taken to consolidate four claims call centres into two.
Such efficiency gains have reduced loss adjustment expenses, improving the company’s loss ratio. Ultimately, investment in automation and analytics have helped Travelers “refine indemnity payouts and drive operational efficiencies.”
Schnitzer stated that over 50% of all claims made to Travelers are now eligible for straight-through processing, and customers are adopting this processing approximately in two-thirds of cases. He went on to say that: “Another 15% of all claims are processed with advanced digital tools. All of those percentages are growing.”
Despite automated tools doing the bulk of claims work, the CEO said that some customers still prefer to call the company to report and discuss claims. Therefore, Travelers has set up an advanced natural language generative AI voice agent that handles initial phone calls.
Schnitzer heralded the success of this voice agent, saying: “Early customer adoption is exceeding our expectation.”
AI and automation reshaping operations in Travelers
The benefits of AI and automation are far-reaching, beyond just claims call centres, according to Schnitzer. “Other use cases enhance underwriting decision quality and efficiency and improve the experience for customers, agents, brokers and employees.”
Greg Toczydlowski, executive vice president and president of business insurance for Travelers, spoke about how gen AI agents have been used to “efficiently mine” data sources, both internally and externally. These help the company “better understand and synthesise the risk characteristics.” Toczydlowski added that the recent agent additions have boosted the speed of underwriting processes and improved segmented pricing.
He explained how the company’s commercial underwriters are performing very well, enhanced by advanced tools used to evaluate risks. Tools include models that refine pricing and summarise past claims data, streamlining the entire process.
“They’re not only executing with excellence in the market today, but they’re also helping to shape the transformation of our industry,” Toczydlowski said.
Michael Klein, executive vice president and president of personal insurance for Travelers, underscored AI’s importance in personal insurance, saying it is 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 the property portfolio. Based on this score, accounts with the highest probable risk of loss are presented to underwriters for review. From there, our renewal underwriting platform uses generative AI to consolidate data into summaries of relevant actionable information for our underwriters to evaluate.”
As a result, Klein said that there has been a 30% reduction in average handle times. Therefore, “the net result is that our underwriters focus their efforts on decisions most likely to improve profitability and do so more efficiently.”
In Speciality insurance, Jeffrey Klenk, president of bond & speciality insurance at Travelers, commented on how AI has cut times to intake submissions from “hours to just minutes.” He also said AI has recently been implemented to streamline renewals.
Innovation 2.0 – AI’s impact on jobs
Despite claims call centre headcounts already reduced, Schnitzer did not speculate on further cuts. Instead, he emphasised the increasing productivity AI has brought to Travelers. “What I would say is that per employee is up, thanks to some productivity and efficiency initiatives, and we expect per employee to continue to go up.”
Travelers’ Innovation 1.0 strategy has been the key driver to the company’s strong 10-year profits, according to Schnitzer. Over the decade, we developed the competitive advantage of an innovation skill set. Now we’re bringing all that Part 1 know-how to Innovation 2.0 at Travelers, powered by AI – and not too far off quantum computing.”
He believes that AI is set to benefit the entire P/C landscape, highlighting how recent advanced AI tools are able to “understand and execute the complex stakeholder interactions, well-defined processes, data-intensive workflows and massive amounts of unstructured data.”
Schnitzer said human expertise with AI “amplifies existing strength,” and said Travelers is investing heavily in “AI and other sophisticated technology solutions.” He said “Dozens of scaled generative AI tools are already in production. Millions of transactions are now automated… And agentic AI isn’t a future aspiration. It’s embedded in our business operations today.”
AI and automated technologies are poised to transform the insurance industry tenfold, as Travelers expects such technologies to “result in faster and more cost-effective delivery of new abilities.”
From product development to new business prospecting to underwriting speed and quality, agent and customer service and more, AI is benefiting Travelers, its customers, and distribution partners, showcasing the technology’s vast impact in the business and 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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