The Travelers Companies, Inc.

Good morning, ladies and gentlemen. Welcome to the fourth quarter results teleconference for Trump.

Business Insurance, Jeff Klink of Bond and Specialty Insurance, and Michael Klein of Personal Insurance. They will discuss the financial results of our business and the current market environment. They will refer to the webcast presentation as they go through prepared remarks, and then we will take your questions. Before I turn the call over to Alan, I'd like to draw your attention to the explanatory note included at the end of the webcast presentation. Our presentation today includes forward-looking statements. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our earnings press release and in our most recent 10Q and 10K filed with the SEC. We do not undertake any obligation to update forward-looking statements. Also in our remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliations are included in our recent earnings press release, financial supplement, and other materials available in the investor section on our website. And now I'd like to turn the call over to Alan Schnitzer.

Thank you, Abby. Good morning, everyone, and thank you for joining us today. We're pleased to report excellent fourth quarter and full year results, a strong and broad-based performance across both underwriting and investments. For both periods, the bottom line results were driven by very strong underlying underwriting income. Particularly given that written margins remain attractive, this is a durable dynamic. For the quarter, we earned a core income of $2.5 billion, or $11.13 per diluted share, generating core return on equity of 29.6%. Underwriting income of $2.2 billion pre-tax increased 21% compared to the prior year quarter, benefiting from higher underlying underwriting income, higher favorable prior year reserve development, and a lower level of catastrophe losses. The underlying result was driven by strong net earned premiums and excellent margins. The underlying combined ratio improved nearly two points to 82.2%. Underwriting results were strong in all three segments. Our high quality investment portfolio also continued to perform well. generating after tax net investment income of $867 million for the quarter, up 10%, driven by strong and reliable returns from our growing fixed income portfolio. Our terrific underwriting and investment results, together with our strong balance sheet, enabled us to return $1.9 billion of capital to shareholders during the quarter, including $1.7 billion of share repurchases. Importantly, at the same time, we continued to make significant strategic investments in our business. Even after this deployment of capital, adjusted book value per share was up 14% compared to a year ago. Turning to the top line, through disciplined marketplace execution across all three segments, we grew net written premiums to $10.9 billion in the quarter. In business insurance, we grew net written premiums to $5.5 billion. Excluding the property line, we grew domestic net written premiums in the segment by 4%. As I shared last quarter, the declining property premium is a large account dynamic. We'll continue to be disciplined in terms of risk selection, pricing, and terms and conditions. Renewal premium change in business insurance was 6.1%. Renewal premium change in auto, CMP, and umbrella remained in the double digits. Excluding the property line, renewal premium change came in strong at just over 8%, including workers' comp, which continues to be low single digits positive. Given the attractive returns, we were pleased that retention in the segment remained strong at 85%. In bond and specialty insurance, we grew net written premiums to $1.1 billion, with excellent retention of 87% and positive renewal premium change in our high-quality management liability business. In our industry-leading surety business, we grew net written premiums from a very strong level in the prior year quarter. In personal insurance, net written premiums of $4.2 billion reflected a continued strong renewal premium change in homeowners and higher new business in auto. You'll hear more shortly from Greg, Jeff, and Michael about our segment results. Before I turn the call over to Dan, I'd like to take a step back and talk about what's driving this performance and what's ahead. About 10 years ago, we embarked on an innovation strategy designed to position our business to grow at industry-leading returns with low volatility. As you can see on slide 18 of our webcast presentation, over the past decade, we've grown our top line at a compound annual rate of 7% while improving our underlying profitability by almost eight points. Notwithstanding a significant increase in our technology spending, that improvement in underlying profitability includes a three-point 10% improvement in our expense ratio. As a consequence of all that, compared to 10 years ago, our underlying underwriting income is more than four times what it had been, our cash flow from operations has more than doubled, and our investment portfolio has grown by 50% to more than $100 billion. As you can see on slide 19, over that same period, core return on equity has averaged more than 1,000 basis points over the 10-year Treasury at industry-low volatility, and we've grown earnings per share on average by 12%. In short, the execution of our strategy has been exceptional. We think about that chapter as Innovation 1.0. Our success with Innovation 1.0 is the result of having done three difficult things very well. Identifying the initiatives that really matter and passing on the merely good ideas that don't, executing effectively, and capturing the value of what we built. Over the decade, we developed the competitive advantage of an innovation skill set. Now we're bringing all that hard-won know-how to Innovation 2.0 at Travelers, powered by AI and not too far off quantum computing. The P&C industry is well-positioned to benefit from AI across the entire value chain. This generation of AI can understand and execute on the complex stakeholder interactions, well-defined processes, data-intensive workflows, and massive amounts of unstructured data that characterize our industry. It gains compound over many, many interactions. In that context, Travelers is particularly well positioned. As an industry leader, we bring differentiating domain expertise. Because AI amplifies existing strength, leaders in the domain are best positioned to use it to drive improvement. In addition, we have decades of high-quality data from millions of transactions and interactions and the skill to invest at significant levels as AI and technology continue to segment the market. We have thousands of engineers, data scientists, and analysts building AI and other sophisticated technology solutions. Dozens of scale generative AI tools are already in production. Millions of transactions are now automated. More than 20,000 of our colleagues use AI tools on a regular basis. And agentic AI isn't a future aspiration. It's embedded in our business operations today. Last week, we in Anthropic announced a partnership to empower 10,000 of our engineers, data scientists, analysts, and product owners with personalized, context-aware, and integrated AI assistance. This initiative will enhance and accelerate the development of software, analytics, and predictive models. In extensive testing, we achieved significantly improved engineering output and meaningful productivity gain. We expect that this will result in faster and more cost-effective delivery of new capabilities across travelers. Everything from product development, to new business prospecting, to underwriting speed and quality, to agent and customer service, and more. benefiting our business, our customers, and our distribution partners. In our claim organization, more than half of all claims are now eligible for straight-through processing, with customers adopting straight-through processing about two-thirds of the time. Another 15% of all claims are processed with advanced digital tools. All of those percentages are growing. To accommodate customers who still prefer to call in to report a claim, Just last week, we launched a natural language generative AI voice agent that takes first notice of loss by phone. Early customer adoption is exceeding our expectation. The results are tangible. In our claim organization, investments we've made, including in automation, straight through processing and analytics, refine indemnity payouts and drive operational efficiencies. It's worth pointing out that the efficiency gains in our claim organization come through loss adjustment expense, benefiting the loss ratio. As just one example, our claimed call center population is down by a third, and this year we'll be consolidating four claimed call centers down to two. And of course, we're deploying AI broadly across the business. Other use cases enhance underwriting decision quality and efficiency, and improve the experience for customers, agents, brokers, and employees. So here's some examples from Greg, Jeff, and Michael. We're so early in this transformation, which means the benefits, more effective underwriting, improved operating leverage, and profitable growth will continue to build. To sum it up, our results this year and over time reflect the power of our earnings engine, fueled by the disciplined execution of our strategy. For the full year, core income was up 26% to $6.3 billion, or $27.59 per diluted share, generating core return on equity of 19.4%. And during the year, we grew adjusted book value per share by 14% after returning $4.2 billion of excess capital to shareholders and investing more than a billion and a half dollars in cutting edge AI and other technology initiatives. Our operational and financial success in the face of another year of elevated catastrophe losses for the industry supports our ability to be there for our customers. In 2025, we handled a million and a half claims, That's about one every 20 seconds and paid out more than $23 billion in claim payments. We also met our objective of closing 90% of claims arising out of catastrophes within 30 days. 2026 and in future years, we'll be there to help our customers and communities recover and to enable individuals and businesses to thrive. Looking ahead, we're also very well positioned to continue generating substantial shareholder value. The durability of our strong underlying business performance provides a powerful foundation for continued strong bottom line results, leading returns, and strong cash flows. Operating from this position of strength, we remain highly confident in the outlook for travelers in 2026 and beyond. And with that, I'm pleased to turn the call over to Dan.