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What changed in Travelers Companies (The)'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Travelers Companies (The)'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+639 added−651 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in Travelers Companies (The)'s 2025 10-K

639 paragraphs added · 651 removed · 585 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

169 edited+15 added−23 removed313 unchanged
Biggest changeThe combined maximum of the 401(k) match and the Paying It Forward savings contribution is 5% of eligible pay, up to a maximum of $7,500; • A Pension Plan that provides annual pay credits from 2% to 6% of eligible pay based on age and years of service, plus quarterly interest credits; • Financial education program, free one on one guidance sessions, on-demand financial webinars and workshops; and • Investment advisory service that provides day-to-day management of employees 401(k) account. 32 Other • Life insurance; • Short- and long-term disability coverages; • Paid time-off, starting at 20 days per year, up to a maximum of 30 days per year based on years of service, plus the ability to purchase up to six additional days per year; • Designated Company holidays plus floating holiday(s); • Paid parental and adoption leave; • Childcare discounts; • A Legal Services Plan; • An Educational Assistance Program; • A corporate discount program; and • Paid time off for volunteering.
Biggest changeOther • Life insurance; • Short- and long-term disability coverages; • Paid time-off, starting at 20 days per year, up to a maximum of 30 days per year based on years of service, plus the ability to purchase up to six additional days per year; • Designated Company holidays plus floating holiday(s); • Paid parental and adoption leave; • Childcare discounts; • A Legal Services Plan; • An Educational Assistance Program; • A corporate discount program; and • Paid time off for volunteering.
Treasury Department as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, has limited authority over the insurance industry.
Treasury Department as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), has limited authority over the insurance industry.
An investor should carefully consider the risks and all of the other information set forth in this annual report, including the discussions included in “Item 1A—Risk Factors,” “Item 7A—Quantitative and Qualitative Disclosures About Market Risk,” and “Item 8—Financial Statements and Supplementary Data.” OTHER INFORMATION Seasonality A discussion of the extent to which the Company’s business may be seasonal can be found under “Outlook” within “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated by reference into this Item 1.
An investor should carefully consider the risks and all of the other information set forth in this annual report, including the discussions included in “Item 1A—Risk Factors,” “Item 7A—Quantitative and Qualitative Disclosures About Market Risk,” and “Item 8—Financial Statements and Supplementary Data.” 28 OTHER INFORMATION Seasonality A discussion of the extent to which the Company’s business may be seasonal can be found under “Outlook” within “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” and is incorporated by reference into this Item 1.
Guaranteed-cost products An insurance policy where the premiums charged will not be adjusted for actual loss experience during the covered period. 37 Guaranty fund A state-regulated mechanism that is financed by assessing insurers doing business in those states. Should insolvencies occur, these funds are available to meet some or all of the insolvent insurer’s obligations to policyholders.
Guaranteed-cost products An insurance policy where the premiums charged will not be adjusted for actual loss experience during the covered period. Guaranty fund A state-regulated mechanism that is financed by assessing insurers doing business in those states. Should insolvencies occur, these funds are available to meet some or all of the insolvent insurer’s obligations to policyholders.
In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting “Email Notifications” under the “Investor Toolkit” section at investor.travelers.com . 33 Glossary of Selected Insurance Terms Accident year The annual calendar accounting period in which loss events occurred, regardless of when the losses are actually reported, booked or paid.
In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting “Email Notifications” under the “Investor Toolkit” section at investor.travelers.com . Glossary of Selected Insurance Terms Accident year The annual calendar accounting period in which loss events occurred, regardless of when the losses are actually reported, booked or paid.
The applicable state 3 laws and regulations establish standards in certain lines of business to ensure that rates are not excessive, inadequate, unfairly discriminatory, or used to engage in unfair price competition. The Company’s ability to increase rates and the relative timing of the process are dependent upon each respective state’s requirements, as well as the competitive market environment.
The applicable state laws and regulations establish standards in certain lines of business to ensure that rates are not excessive, inadequate, unfairly discriminatory, or used to engage in unfair price competition. The Company’s ability to increase rates and the relative timing of the process are dependent upon each respective state’s requirements, as well as the competitive market environment.
For additional information concerning credit risk in certain of the Company’s businesses, see “Item 1A—Risk Factors—We are exposed to credit risk in certain of our insurance operations and with respect to certain guarantee or indemnification arrangements that we have with third parties.” Product Lines Business Insurance provides the following types of coverages: Domestic • Workers’ Compensation.
For additional information concerning credit risk in certain of the Company’s businesses, see “Item 1A—Risk Factors—We are exposed to credit risk in certain of our insurance operations and with respect to certain guarantee or indemnification arrangements that we have with third parties.” 7 Product Lines Business Insurance provides the following types of coverages: Domestic • Workers’ Compensation.
Other companies’ method of computing a similarly titled measure may not be comparable to the Company’s method of computing this ratio. Underwriting gain or loss Net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. 42 Unearned premium The portion of premiums written that is allocable to the unexpired portion of the policy term.
Other companies’ method of computing a similarly titled measure may not be comparable to the Company’s method of computing this ratio. Underwriting gain or loss Net earned premiums and fee income less claims and claim adjustment expenses and insurance-related expenses. Unearned premium The portion of premiums written that is allocable to the unexpired portion of the policy term.
Competitors in this market are primarily national property and casualty insurance companies (including international companies doing business in the U.S.) that write most classes of business using traditional products and pricing, and regional insurance companies. Companies compete based on product offerings, service levels, price, claim and loss prevention services and ease and speed of doing 9 business.
Competitors in this market are primarily national property and casualty insurance companies (including international companies doing business in the U.S.) that write most classes of business using traditional products and pricing, and regional insurance companies. Companies compete based on product offerings, service levels, price, claim and loss prevention services and ease and speed of doing business.
Possible reasons for this inability include the risk being too great or the profit being too small under the required insurance rate structure. The costs of the risks associated with these pools are charged back to insurance carriers in proportion to their direct writings. Assumed reinsurance Insurance risks acquired from a ceding company.
Possible reasons for this inability include the risk being too great or the profit being too small under the required insurance rate structure. The costs of the risks associated with these pools are charged back to insurance carriers in proportion to their direct writings. 32 Assumed reinsurance Insurance risks acquired from a ceding company.
Both national (including international companies doing business in the U.S.) and regional property and casualty insurance companies compete in the Select Accounts market which generally comprises lower-hazard, “Main Street” business customers. Risks are underwritten and priced using standard industry practices and a combination of proprietary and standard industry product offerings.
Both national (including international companies doing business 9 in the U.S.) and regional property and casualty insurance companies compete in the Select Accounts market which generally comprises lower-hazard, “Main Street” business customers. Risks are underwritten and priced using standard industry practices and a combination of proprietary and standard industry product offerings.
As the term is used in this document, “loss reserves” is meant to include reserves for both losses and LAE. 38 Loss reserve development The increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims.
As the term is used in this document, “loss reserves” is meant to include reserves for both losses and LAE. Loss reserve development The increase or decrease in incurred claims and claim adjustment expenses as a result of the re-estimation of claims and claim adjustment expense reserves at successive valuation dates for a given group of claims.
The Company’s insurance subsidiaries based in the United Kingdom (U.K.) are regulated by two regulatory bodies, The Prudential Regulation Authority (PRA) and The Financial Conduct Authority (FCA). One of the Company’s U.K. insurance subsidiaries is also authorized in the U.S. as a surplus lines insurer subject to U.S. state regulation applicable to such insurers.
International Regulation The Company’s insurance subsidiaries based in the United Kingdom (U.K.) are regulated by two regulatory bodies, The Prudential Regulation Authority (PRA) and The Financial Conduct Authority (FCA). One of the Company’s U.K. insurance subsidiaries is also authorized in the U.S. as a surplus lines insurer subject to U.S. state regulation applicable to such insurers.
Within Middle Market, products and services are tailored to certain targeted industry segments of significant size and complexity that require unique underwriting, claims handling services, risk management or other insurance-related products and services. 6 • National Accounts markets and distributes products and services to large companies through a large network of national and regional brokers.
Within Middle Market, products and services are tailored to certain targeted industry segments of significant size and complexity that require unique underwriting, claims handling services, risk management or other insurance-related products and services. • National Accounts markets and distributes products and services to large companies through a large network of national and regional brokers.
Business Insurance generally retains its workers’ compensation exposures. Reinsurance treaties often have aggregate limits or caps which may result in larger net per-risk retentions if the aggregate limits or caps are reached. Business Insurance utilizes facultative reinsurance to provide additional limits capacity or to reduce retentions on an individual 8 risk basis.
Business Insurance generally retains its workers’ compensation exposures. Reinsurance treaties often have aggregate limits or caps which may result in larger net per-risk retentions if the aggregate limits or caps are reached. Business Insurance utilizes facultative reinsurance to provide additional limits capacity or to reduce retentions on an individual risk basis.
Premiums The amount charged during the year on policies and contracts issued, renewed or reinsured by an insurance company. Probable maximum loss (PML) The maximum amount of loss that the Company would be expected to incur on a policy if a loss were to occur, giving effect to collateral, reinsurance and other factors.
Premiums The amount charged during the year on policies and contracts issued, renewed or reinsured by an insurance company. 37 Probable maximum loss (PML) The maximum amount of loss that the Company would be expected to incur on a policy if a loss were to occur, giving effect to collateral, reinsurance and other factors.
For statutory reporting, the associated reserves are reported net of the expected fee income. For GAAP reporting, amounts payable under structured settlements for which the Company did not receive a release of its obligation from the claimant are reported in loss reserves and reinsurance recoverables, net of an allowance for estimated uncollectible amounts.
For statutory reporting, the associated reserves are reported net of the expected fee income. 19 For GAAP reporting, amounts payable under structured settlements for which the Company did not receive a release of its obligation from the claimant are reported in loss reserves and reinsurance recoverables, net of an allowance for estimated uncollectible amounts.
The term may apply to an insurance policy, where the policyholder is an individual, family or business, or a reinsurance policy, where the policyholder is an insurance company. Retention rate The percentage of prior period premiums (excluding renewal premium changes), accounts or policies available for renewal in the current period that were renewed.
The term may apply to an insurance policy, where the policyholder is an individual, family or business, or a reinsurance policy, where the policyholder is an insurance company. 38 Retention rate The percentage of prior period premiums (excluding renewal premium changes), accounts or policies available for renewal in the current period that were renewed.
Business Insurance is organized as follows: 4 Domestic • Select Accounts provides small businesses with property and casualty insurance products and services, including commercial multi-peril, workers’ compensation, commercial automobile, general liability and commercial property. • Middle Market provides mid-sized businesses with property and casualty insurance products and services, including workers’ compensation, general liability, commercial multi-peril, commercial automobile and commercial property, as well as risk management, claims handling and other services.
Business Insurance is organized as follows: Domestic • Select Accounts provides small businesses with property and casualty insurance products and services, including commercial multi-peril, workers’ compensation, commercial automobile, general liability and commercial property. • Middle Market provides mid-sized businesses with property and casualty insurance products and services, including commercial multi-peril, general liability, commercial automobile, workers’ compensation and commercial property, as well as risk management, claims handling and other services.
For example, all claims for a given product in a given market for a given accident year would represent a cohort of claims. 35 Combined ratio For Statutory Accounting Practices (SAP), the combined ratio is the sum of the SAP loss and LAE ratio and the SAP underwriting expense ratio as defined in the statutory financial statements required by insurance regulators.
For example, all claims for a given product in a given market for a given accident year would represent a cohort of claims. Combined ratio For Statutory Accounting Practices (SAP), the combined ratio is the sum of the SAP loss and LAE ratio and the SAP underwriting expense ratio as defined in the statutory financial statements required by insurance regulators.
The treaty only provides coverage for terrorism events in limited circumstances and excludes entirely losses arising from nuclear, biological, chemical or radiological attacks. The treaty only provides coverage for cyber events and civil unrest in limited circumstances and excludes losses arising from communicable disease. The Company’s underlying insurance coverages generally exclude coverage for communicable disease. 17 Catastrophe Bonds .
The treaty only provides coverage for terrorism events in limited circumstances and excludes entirely losses arising from nuclear, biological, chemical or radiological attacks. The treaty only provides coverage for cyber events and civil unrest in limited circumstances and excludes losses arising from communicable disease. The Company’s underlying insurance coverages generally exclude coverage for communicable disease. Catastrophe Bonds .
International • International , through its operations in Canada, the United Kingdom and the Republic of Ireland, provides property and casualty insurance and risk management services to several customer groups, including, among others, those in the technology, manufacturing, public services and commercial real estate industry sectors.
International • International , through its operations in the United Kingdom and the Republic of Ireland, provides property and casualty insurance and risk management services to several customer groups, including, among others, those in the technology, manufacturing, public services and commercial real estate industry sectors.
Reinsurance treaties often have aggregate limits or caps which may result in larger net per risk retentions if the aggregate limits or caps are reached. Bond & Specialty Insurance utilizes facultative reinsurance to provide additional limits capacity or to reduce retentions on an individual 11 risk basis.
Reinsurance treaties often have aggregate limits or caps which may result in larger net per risk retentions if the aggregate limits or caps are reached. Bond & Specialty Insurance utilizes facultative reinsurance to provide additional limits capacity or to reduce retentions on an individual risk basis.
The requirement for an insurer to conduct an ORSA is intended to foster an effective level of ERM for all insurers within a holding company system and to provide a group-wide perspective on risks and capital as a supplement to the legal entity view.
The requirement for an insurer to conduct an ORSA is intended to foster an effective level of ERM for 27 all insurers within a holding company system and to provide a group-wide perspective on risks and capital as a supplement to the legal entity view.
Each account is underwritten based on the unique risk characteristics, loss history and coverage needs of the account. The ability to underwrite at this detailed level allows Middle Market to have a broad risk appetite and a diversified customer base.
Each account is underwritten based on the 6 unique risk characteristics, loss history and coverage needs of the account. The ability to underwrite at this detailed level allows Middle Market to have a broad risk appetite and a diversified customer base.
Reinsurance agreement A contract specifying the terms of a reinsurance transaction. 39 Renewal premium change The estimated change in average premium on policies that renew, including rate and exposure changes. Such statistics are subject to change based on a number of factors, including changes in estimates.
Reinsurance agreement A contract specifying the terms of a reinsurance transaction. Renewal premium change The estimated change in average premium on policies that renew, including rate and exposure changes. Such statistics are subject to change based on a number of factors, including changes in estimates.
Underlying underwriting expense ratio The underlying underwriting expense ratio is the underwriting expense ratio adjusted to exclude the impact of catastrophes. Underlying underwriting margin Net earned premiums and fee income less claims and claim adjustment expenses (excluding catastrophe losses and prior year reserve development) and insurance-related expenses.
Underlying underwriting expense ratio The underlying underwriting expense ratio is the underwriting expense ratio adjusted to exclude the impact of catastrophes. 40 Underlying underwriting margin Net earned premiums and fee income less claims and claim adjustment expenses (excluding catastrophe losses and prior year reserve development) and insurance-related expenses.
See “Item 1A—Risk Factors—The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.” Domestic Competitors typically write Select Accounts business through independent agents and brokers and, to a lesser extent, as direct writers, including through affinity and other partner platforms.
See “Item 1A—Risk Factors—The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change, including with respect to artificial intelligence, and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.” Domestic Competitors typically write Select Accounts business through independent agents and brokers and, to a lesser extent, as direct writers, including through affinity and other partner platforms.
See “Item 1A—Risk Factors—The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.” CLAIMS MANAGEMENT The Company’s claim functions are managed through its Claims Services organization, with locations in the United States and in the other countries where it does business.
See “Item 1A—Risk Factors—The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change, including with respect to artificial intelligence, and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.” CLAIMS MANAGEMENT The Company’s claim functions are managed through its Claims Services organization, with locations in the United States and in the other countries where it does business.
The Company emphasizes 7 managed care cost containment strategies, which involve employers, employees and care providers in a collaborative effort that focuses on the injured employee’s early return to work and cost-effective quality care. • Commercial Automobile.
The Company emphasizes managed care cost containment strategies, which involve employers, employees and care providers in a collaborative effort that focuses on the injured employee’s early return to work and cost-effective quality care. • Commercial Automobile.
National Property and Other’s competitive strategy typically is based on the application of focused industry knowledge to insurance and risk needs. International International competes with numerous international and domestic insurers in Canada, the United Kingdom and the Republic of Ireland.
National Property and Other’s competitive strategy typically is based on the application of focused industry knowledge to insurance and risk needs. International International competes with numerous international and domestic insurers in the United Kingdom and the Republic of Ireland.
For management liability coverages, including but not limited to directors’ and officers’ liability, professional liability, employment practices liability, fidelity liability, fiduciary liability and cyber risk liability, Bond & Specialty Insurance generally limits net retentions to $25.0 million per policy.
For management liability coverages, including but not limited to directors’ and officers’ liability, professional liability, 11 employment practices liability, fidelity liability, fiduciary liability and cyber risk liability, Bond & Specialty Insurance generally limits net retentions to $25.0 million per policy.
The Company’s managing agency (Travelers Syndicate Management Limited, or TSML) of its Lloyd’s syndicate (Syndicate 5000 at Lloyd’s) is also regulated by the PRA and the FCA, which have delegated certain regulatory responsibilities to the 26 Council of Lloyd’s.
The Company’s managing agency (Travelers Syndicate Management Limited, or TSML) of its Lloyd’s syndicate (Syndicate 5000 at Lloyd’s) is also regulated by the PRA and the FCA, which have delegated certain regulatory responsibilities to the Council of Lloyd’s.
The principal amount of the catastrophe bonds will be reduced by any amounts paid to the Company under the reinsurance agreement. As with any reinsurance agreement, there is credit risk associated with collecting amounts due from reinsurers.
The principal amount of the catastrophe bonds will be reduced by any amounts paid to the Company under the reinsurance agreement. 17 As with any reinsurance agreement, there is credit risk associated with collecting amounts due from reinsurers.
Statutory accounting practices require retroactive reinsurance balances to be recorded in other liabilities as contra-liabilities rather than in loss reserves. 20 Asbestos and Environmental Claims Asbestos and environmental claims are segregated from other claims and are handled separately within the Company’s Strategic Resolution Group, a separate unit staffed by dedicated legal, claim, finance and engineering professionals which also has responsibility for enterprise-wide major case activity.
Statutory accounting practices require retroactive reinsurance balances to be recorded in other liabilities as contra-liabilities rather than in loss reserves. Asbestos Claims Asbestos claims are segregated from other claims and are handled separately within the Company’s Strategic Resolution Group, a separate unit staffed by dedicated legal, claim, finance and engineering professionals which also has responsibility for enterprise-wide major case activity.
Total capitalization The sum of total shareholders’ equity and debt. 41 Treaty reinsurance The reinsurance of a specified type or category of risks defined in a reinsurance agreement (a “treaty”) between a primary insurer or other reinsured and a reinsurer.
Total capitalization The sum of total shareholders’ equity and debt. Treaty reinsurance The reinsurance of a specified type or category of risks defined in a reinsurance agreement (a “treaty”) between a primary insurer or other reinsured and a reinsurer.
The treaty provides for recovery of 80% of each qualifying loss in excess of a $4.0 billion retention up to $5.0 billion, 95% of losses in excess of $5.0 billion up to $7.5 billion and 100% of losses in excess of $7.5 billion up to $8.0 billion.
The treaty provides for recovery of 100% of each qualifying loss in excess of a $3.0 billion retention up to $4.0 billion, 80% of losses in excess of $4.0 billion up to $5.0 billion, 95% of losses in excess of $5.0 billion up to $7.5 billion and 100% of losses in excess of $7.5 billion up to $8.0 billion.
The commercial residual market business of National Accounts services approximately 36% of the total workers’ compensation assigned risk market, making the Company one of the largest servicing carriers in the industry. • National Property and Other markets and distributes products and services to a wide customer base, providing traditional and customized insurance programs to a broad range of customer sizes through a large network of agents and brokers.
The commercial residual market business of National Accounts services approximately 38% of the total workers’ compensation assigned risk market, making the Company one of the largest servicing carriers in the industry. • National Property and Other markets and distributes products and services to a wide customer base, providing traditional and customized insurance programs to a broad range of customer sizes through a large network of agents and brokers.
Based on preliminary 2024 IRIS ratios calculated by the Company for its lead domestic insurance subsidiaries, in both 2024 and 2023, The Travelers Indemnity Company had results outside the normal range for one IRIS ratio due to the size of its investments in certain non-fixed maturity securities, while Travelers Casualty and Surety Company had results outside the normal range for one IRIS ratio due to the amount of dividends received from its subsidiaries.
Based on preliminary 2025 IRIS ratios calculated by the Company for its lead domestic insurance subsidiaries, in both 2025 and 2024, Travelers Casualty and Surety Company had results outside the normal range for one IRIS ratio due to the amount of dividends received from its subsidiaries, while in 2024 The Travelers Indemnity Company had results outside the normal range for one IRIS ratio due to the size of its investments in certain non-fixed maturity securities.
According to A.M. Best, there are approximately 1,100 property and casualty groups in the United States, comprising approximately 2,600 property and casualty companies. Of those groups, the top 150 accounted for approximately 94% of the consolidated industry’s total net written premiums in 2023. The Company competes with both foreign and domestic insurers.
According to A.M. Best, there are approximately 1,100 property and casualty groups in the United States, comprising approximately 2,600 property and casualty companies. Of those groups, the top 150 accounted for approximately 94% of the consolidated industry’s total net written premiums in 2024. The Company competes with both foreign and domestic insurers.
A supervisory college is a forum of the regulators having jurisdictional authority over a holding company’s various insurance subsidiaries, including foreign insurance subsidiaries, convened to meet with the insurer’s executive 23 management to evaluate the insurer’s business strategies, approach to enterprise risk management and corporate governance from both a groupwide and legal-entity perspective.
A supervisory college is a forum of the regulators having jurisdictional authority over a holding company’s various insurance subsidiaries, including foreign insurance subsidiaries, convened to meet with the insurer’s executive 22 management to evaluate the insurer’s business strategies, approach to enterprise risk management and corporate governance from both a groupwide and legal-entity perspective.
Management does not anticipate regulatory action as a result of the 2024 IRIS ratio results for the lead insurance subsidiaries or their insurance subsidiaries. In all instances in prior years, regulators have been satisfied upon follow-up that no regulatory action was required. Risk-Based Capital (RBC) Requirements.
Management does not anticipate regulatory action as a result of the 2025 IRIS ratio results for the lead insurance subsidiaries or their insurance subsidiaries. In all instances in prior years, regulators have been satisfied upon follow-up that no regulatory action was required. Risk-Based Capital (RBC) Requirements.
See “Item 1A—Risk Factors—The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.” International International competes with numerous international and domestic insurers in Canada, the United Kingdom, the Republic of Ireland, and in Brazil through a joint venture.
See “Item 1A—Risk Factors—The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change, including with respect to artificial intelligence, and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.” 12 International International competes with numerous international and domestic insurers in Canada, the United Kingdom, the Republic of Ireland, and in Brazil through a joint venture.
Agencies and brokers are serviced by 88 field offices and supported by customer service centers where the Company performs services for agents for a fee and centralized business centers where the Company processes new and renewal business that meet certain underwriting criteria. Business Insurance builds relationships with well-established, independent insurance agencies and brokers.
Agencies and brokers are serviced by 80 field offices and supported by customer service centers where the Company performs services for agents for a fee and centralized business centers where the Company processes new and renewal business that meet certain underwriting criteria. Business Insurance builds relationships with well-established, independent insurance agencies and brokers.
In addition, agencies can choose to shift the ongoing service responsibility for Personal Insurance’s customers to the Company’s Customer Care Program, where the Company provides, on behalf of an agency, a comprehensive array of customer service needs, including billing inquiries, coverage discussions and account changes.
In addition, agencies can choose to shift the ongoing service responsibility for Personal Insurance’s customers to the Company’s Customer Care Program, where the Company provides, on behalf of an agency, a comprehensive array of customer services, including billing inquiries, coverage discussions and account changes.
See “—Reinsurance.” BUSINESS INSURANCE Business Insurance offers a broad array of property and casualty insurance products and services to its customers, primarily in the United States, as well as in Canada, the United Kingdom, the Republic of Ireland and throughout other parts of the world, including as a corporate member of Lloyd’s.
See “—Reinsurance.” 4 BUSINESS INSURANCE Business Insurance offers a broad array of property and casualty insurance products and services to its customers, primarily in the United States, as well as in the United Kingdom, the Republic of Ireland and throughout other parts of the world, including as a corporate member of Lloyd’s.
For additional information on asbestos and environmental claims, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asbestos Claims and Litigation” and “—Environmental Claims and Litigation.” INTERCOMPANY REINSURANCE POOLING ARRANGEMENTS Most of the Company’s domestic insurance subsidiaries participate in an intercompany property and casualty reinsurance pooling arrangement.
For additional information on asbestos claims, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Asbestos Claims and Litigation.” INTERCOMPANY REINSURANCE POOLING ARRANGEMENTS Most of the Company’s domestic insurance subsidiaries participate in an intercompany property and casualty reinsurance pooling arrangement.
The Company’s ability or its willingness to manage its catastrophe exposure by raising prices, modifying policy terms, or reducing exposure to certain 24 geographies may be limited due to considerations of public policy, an evolving political environment, and/or changes in general economic conditions.
The Company’s ability or its willingness to manage its catastrophe exposure by raising prices, modifying policy terms, or reducing exposure to certain 23 geographies may be limited due to considerations of public policy, an evolving political environment, and/or changes in general economic conditions.
Effective January 1, 2025, the Company renewed a quota share reinsurance agreement with subsidiaries of Fidelis Insurance Holdings Limited (Fidelis) for 2025 pursuant to which the Company assumes 20% of the subject gross written premiums of Fidelis on a risk-attaching basis, subject to a loss ratio cap.
Effective January 1, 2026, the Company renewed a quota share reinsurance agreement with subsidiaries of Fidelis Insurance Holdings Limited (Fidelis) for 2026 pursuant to which the Company assumes 20% of the subject gross written premiums of Fidelis on a risk-attaching basis, subject to a loss ratio cap.
The Company has not incurred any losses that have resulted or are expected to result in a recovery under the Long Point Re IV agreement since its inception. 18 Personal Insurance Hurricane Catastrophe Excess-of-Loss Reinsurance Treaty.
The Company has not incurred any losses that have resulted or are expected to result in a recovery under the Long Point Re IV agreement since its inception. Personal Insurance Catastrophe Excess-of-Loss Reinsurance Treaty.
TRV’s domestic insurance subsidiaries are subject to each state’s laws and regulations regarding rate and rule approvals. The applicable laws and regulations generally establish standards to ensure that rates are not excessive, inadequate, unfairly discriminatory or used to engage in unfair price competition.
The Company’s domestic insurance subsidiaries are subject to each state’s laws and regulations regarding rate and rule approvals. The applicable laws and regulations generally establish standards to ensure that rates are not excessive, inadequate, unfairly discriminatory or used to engage in unfair price competition.
(2) No other single state accounted for 3.0% or more of the Company’s consolidated direct written premiums written in 2024. Catastrophe Exposure The Company’s property and casualty insurance operations expose it to claims arising out of catastrophes.
(2) No other single state accounted for 3.0% or more of the Company’s consolidated direct written premiums written in 2025. Catastrophe Exposure The Company’s property and casualty insurance operations expose it to claims arising out of catastrophes.
While the covered hazards may be similar to those in the U.S. market, the different legal environments can make the product risks and coverage terms very different from those the Company faces in the United States. Net Retention Policy Per Risk The following discussion reflects the Company’s retention policy with respect to Business Insurance as of January 1, 2025.
While the covered hazards may be similar to those in the U.S. market, the different legal environments can make the product risks and coverage terms very different from those the Company faces in the United States. 8 Net Retention Policy Per Risk The following discussion reflects the Company’s retention policy with respect to Business Insurance as of January 1, 2026.
With approximately 12,700 employees, Claims Services employs a group of professionals with diverse skills, including claim adjusters, appraisers, attorneys, investigators, engineers, accountants, nurses, data and analytics professionals, system specialists and training, management and support personnel. Approved external service providers, such as investigators, attorneys and, when necessary, independent adjusters and appraisers, are available for use as appropriate.
With approximately 12,300 employees, Claims Services employs a group of professionals with diverse skills, including claim adjusters, appraisers, attorneys, investigators, engineers, accountants, nurses, data and analytics professionals, system specialists and training, management and support personnel. Approved external service 15 providers, such as investigators, attorneys and, when necessary, independent adjusters and appraisers, are available for use as appropriate.
A- (4 th of 16) — — AA (3 rd of 21) Travelers Insurance Company of Canada A++ (1 st of 16) — AA- (4 th of 21) — The Dominion of Canada General Insurance Company A (3 rd of 16) — — — Travelers Insurance Company Limited A++ (1 st of 16) — AA (3 rd of 21) — Travelers Insurance Designated Activity Company A++ (1 st of 16) — AA- (4 th of 21) — ___________________________________________ (a) The Travelers Reinsurance Pool consists of: The Travelers Indemnity Company, The Charter Oak Fire Insurance Company, The Phoenix Insurance Company, The Travelers Indemnity Company of Connecticut, The Travelers Indemnity Company of America, Travelers Property Casualty Company of America, Travelers Commercial Casualty Company, TravCo Insurance Company, The Travelers Home and Marine Insurance Company, Travelers Casualty and Surety Company, Northland Insurance Company, Northland Casualty Company, The Standard Fire Insurance Company, The Automobile Insurance Company of Hartford, Connecticut, Travelers Casualty Insurance Company of America, Farmington Casualty Company, Travelers Commercial Insurance Company, Travelers Casualty Company of Connecticut, Travelers Property Casualty Insurance Company, Travelers Personal Security Insurance Company, Travelers Personal Insurance Company, St.
A- (4 th of 16) — — AA (3 rd of 21) Travelers Insurance Company Limited A++ (1 st of 16) — AA (3 rd of 21) — Travelers Insurance Designated Activity Company A++ (1 st of 16) — AA- (4 th of 21) — ___________________________________________ (a) The Travelers Reinsurance Pool consists of: The Travelers Indemnity Company, The Charter Oak Fire Insurance Company, The Phoenix Insurance Company, The Travelers Indemnity Company of Connecticut, The Travelers Indemnity Company of America, Travelers Property Casualty Company of America, Travelers Commercial Casualty Company, TravCo Insurance Company, The Travelers Home and Marine Insurance Company, Travelers Casualty and Surety Company, Northland Insurance Company, Northland Casualty Company, The Standard Fire Insurance Company, The Automobile Insurance Company of Hartford, Connecticut, Travelers Casualty Insurance Company of America, Farmington Casualty Company, Travelers Commercial Insurance Company, Travelers Casualty Company of Connecticut, Travelers Property Casualty Insurance Company, Travelers Personal Security Insurance Company, Travelers Personal Insurance Company, St.
For additional information concerning regulations applicable to the Company, including cyber regulations, see “Item 1A—Risk Factors—Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth” and “Item 1A—Risk Factors—If we experience difficulties with technology, data and network security (including as a result of cyber attacks), outsourcing relationships or cloud-based technology, our ability to conduct our business could be negatively impacted.” ENTERPRISE RISK MANAGEMENT The Company’s Enterprise Risk Management (ERM) activities involve both the identification and assessment of a broad range of risks and the execution of coordinated strategies to effectively manage these risks.
For additional information concerning regulations applicable to the Company, including cyber regulations, see “Item 1A—Risk Factors—Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth” and “Item 1A—Risk Factors—If, as a result of a cyber-attack (the risk of which could be exacerbated by geopolitical tensions) or otherwise, we experience difficulties with technology, data and network security, outsourcing relationships or cloud-based technology, our ability to conduct our business could be negatively impacted.” ENTERPRISE RISK MANAGEMENT The Company’s ERM activities involve both the identification and assessment of a broad range of risks and the execution of coordinated strategies to effectively manage these risks.
(2) No other single state accounted for 3.0% or more of Personal Insurance’s direct written premiums in 2024. Competition Domestic Although national companies (including international companies doing business in the U.S.) write the majority of this business, Personal Insurance also faces competition from many regional and local companies.
(2) No other single state accounted for 3.0% or more of Personal Insurance’s direct written premiums in 2025. Competition Although national companies (including international companies doing business in the U.S.) write the majority of this business, Personal Insurance also faces competition from many regional and local companies.
This treaty covers the accumulation of certain property losses arising from one or multiple occurrences for the period January 1, 2025, through and including December 31, 2025.
This treaty covers the accumulation of certain property losses arising from one or multiple occurrences for the period January 1, 2026, through and including December 31, 2026.
For third-party liability, Business Insurance generally limits its net retention, through the use of reinsurance, to a maximum of $6.7 million per insured, per occurrence, subject further to a significant aggregate annual deductible. For property exposures, Business Insurance generally limits its net retention, through the use of reinsurance, to a maximum amount per risk of $20.0 million per occurrence.
For third-party liability, Business Insurance generally limits its net retention to a maximum of $6.7 million per insured, per occurrence, through the use of reinsurance, including a significant aggregate annual deductible. For property exposures, Business Insurance generally limits its net retention, through the use of reinsurance, to a maximum amount per risk of $20.0 million per occurrence.
The amount of policyholders’ surplus held by each of the Company’s U.S. insurance subsidiaries at December 31, 2024 and 2023 exceeded the level at which the subsidiaries would be subject to RBC regulatory action on a legal entity basis or the need for additional analysis when evaluated on a combined basis. 25 The RBC formulas have not been designed to differentiate among adequately capitalized companies that operate with levels of capital above the RBC requirement.
The amount of policyholders’ surplus held by each of the Company’s U.S. insurance subsidiaries as of December 31, 2025 and 2024 exceeded the level at which the subsidiaries would be subject to RBC regulatory action on a legal entity basis or the need for additional analysis when evaluated on a combined basis. 24 The RBC formulas have not been designed to differentiate among adequately capitalized companies that operate with levels of capital above the RBC requirement.
In addition, sales and service are provided to customers through contact centers. Principal markets for Personal Insurance products are spread throughout the contiguous United States. In selecting new independent agencies to distribute its products, Personal Insurance considers many factors, including financial stability, staff experience, lead sources, customer facing online and digital capabilities and operating and marketing plans.
In addition, sales and service support are supplemented through contact centers. Principal markets for Personal Insurance products are spread throughout the contiguous United States. In selecting new independent agencies to distribute its products, Personal Insurance considers many factors, including financial stability, staff experience, lead sources, customer facing online and digital capabilities and operating and marketing plans.
Savings and Retirement • A 401(k) Savings Plan, through which the Company matches employee contributions dollar-for-dollar up to 5% of eligible pay, with a maximum annual Company match of $7,500; • The Paying It Forward Savings Program, through which the Company supports employees with student loans by making an annual contribution in the employee’s 401(k) account equal to the annual student loan payments.
Savings and Retirement • A 401(k) Savings Plan, through which the Company matches employee contributions dollar-for-dollar up to 5% of eligible pay, with a maximum annual Company match of $7,500 for 2025 and $8,000 for 2026; • The Paying It Forward Savings Program, through which the Company supports employees with student loans by making an annual contribution in the employee’s 401(k) account equal to the annual student loan payments.
For a discussion of the risks to the Company’s claims-paying and financial strength ratings, see the risk factor entitled “A downgrade in our claims-paying and financial strength ratings could adversely impact our business volumes, adversely impact our ability to access the capital markets and increase our borrowing costs” included in “Part I—Item 1A—Risk Factors.” 21 Claims — Paying Ratings The following table summarizes the current claims-paying (or financial strength) ratings for each of the Company’s rated entities as of February 13, 2025, including the position of each rating in the applicable agency’s rating scale.
For a discussion of the risks to the Company’s claims-paying and financial strength ratings, see the risk factor entitled “A downgrade in our claims-paying and financial strength ratings could adversely impact our business volumes, adversely impact our ability to access the capital markets and increase our borrowing costs” included in “Part I—Item 1A—Risk Factors.” Claims — Paying Ratings The following table summarizes the current claims-paying (or financial strength) ratings for each of the Company’s rated entities as of February 12, 2026, including the position of each rating in the applicable agency’s rating scale.
In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate, and certain other investments, subject to specified limits and certain other qualifications, depending on the type of investment. At December 31, 2024 and 2023, the Company was in compliance with these laws and regulations.
In general, these laws and regulations permit investments in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate, and certain other investments, subject to specified limits and certain other qualifications, depending on the type of investment. As of December 31, 2025 and 2024, the Company was in compliance with these laws and regulations.
Net Retention Policy Per Risk The following discussion reflects the Company’s retention policy with respect to Bond & Specialty Insurance as of January 1, 2025.
Net Retention Policy Per Risk The following discussion reflects the Company’s retention policy with respect to Bond & Specialty Insurance as of January 1, 2026.
Therefore, the maximum recovery under the treaty would be $3.7 billion, or 92%, of the total $4.0 billion limit. Qualifying losses for each occurrence are after a $100 million deductible. The treaty covers all of the Company’s exposures in North America and all waters contiguous thereto.
Therefore, the maximum recovery under the treaty would be $4.7 billion, or 94%, of the total $5.0 billion limit. Qualifying losses for each occurrence are after a $100 million deductible. The treaty covers all of the Company’s exposures in North America and all waters contiguous thereto.
Reserves on Statutory Accounting Basis At December 31, 2024, 2023 and 2022, claims and claim adjustment expense reserves (net of reinsurance) prepared in accordance with U.S. generally accepted accounting principles (GAAP reserves) were $93 million higher, $87 million higher and $91 million higher, respectively, than those reported in the Company’s respective annual financial reports filed with insurance regulators, which are prepared in accordance with statutory accounting practices (statutory reserves).
Reserves on Statutory Accounting Basis As of December 31, 2025, 2024 and 2023, claims and claim adjustment expense reserves (net of reinsurance) prepared in accordance with U.S. generally accepted accounting principles (GAAP reserves) were $99 million higher, $93 million higher and $87 million higher, respectively, than those reported in the Company’s respective annual financial reports filed with insurance regulators, which are prepared in accordance with statutory accounting practices (statutory reserves).
United States field claim management teams located in 16 claim centers and 56 satellite and specialty-only offices in 42 states are organized to maintain focus on the specific claim characteristics unique to the businesses within the Company’s business segments.
United States field claim management teams located in 15 claim centers and 57 satellite and specialty-only offices in 42 states are organized to maintain focus on the specific claim characteristics unique to the businesses within the Company’s business segments.
Debt Ratings The following table summarizes the current debt, trust preferred securities and commercial paper ratings of the Company and its subsidiaries as of February 13, 2025. The table also presents the position of each rating in the applicable agency’s rating scale. A.M.
Debt Ratings The following table summarizes the current debt, trust preferred securities and commercial paper ratings of the Company and its subsidiaries as of February 12, 2026. The table also presents the position of each rating in the applicable agency’s rating scale. A.M.
The average employee tenure at the Company is more than 11 years, and 20 years for the Company’s approximately 750 most senior leaders. The Company’s average global voluntary turnover rate over the past three years was approximately 9%.
The average employee tenure at the Company is more than 11 years, and more than 20 years for the Company’s approximately 700 most senior leaders. The Company’s average global voluntary turnover rate over the past three years was approximately 8%.
ORSA is now required in the United States, the U.K., Europe and Canada and is in various stages of implementation in other jurisdictions, and included in the IAIS standards.
ORSA is required in the United States, the U.K., Ireland and Canada and is in various stages of implementation in other jurisdictions, and included in the IAIS standards.
Best Moody’s S&P Fitch Senior debt a+ (5 th of 22) A2 (6 th of 21) A (6 th of 22) A (6 th of 22) Junior subordinated debentures a- (7 th of 22) A3 (7 th of 21) BBB+ (8 th of 22) BBB+ (8 th of 22) Commercial paper AMB-1+ (1 st of 5) P-1 (1 st of 4) A-1 (2 nd of 10) F1 (2 nd of 8) Rating Agency Actions The following rating agency actions were taken with respect to the Company from February 15, 2024, the date on which the Company filed its Annual Report on Form 10-K for the year ended December 31, 2023, through February 13, 2025: • On April 22, 2024, Moody’s affirmed all ratings of the Company.
Best Moody’s S&P Fitch Senior debt a+ (5 th of 22) A2 (6 th of 21) A (6 th of 22) A (6 th of 22) Junior subordinated debentures a- (7 th of 22) A3 (7 th of 21) BBB+ (8 th of 22) BBB+ (8 th of 22) Commercial paper AMB-1+ (1 st of 5) P-1 (1 st of 4) A-1 (2 nd of 10) F1 (2 nd of 8) Rating Agency Actions The following rating agency actions were taken with respect to the Company from February 13, 2025, the date on which the Company filed its Annual Report on Form 10-K for the year ended December 31, 2024, through February 12, 2026: • On August 8, 2025, A.M.
As calculated and reported in the Company’s most recent Proxy Statement filed in April 2024, excluding the Company’s Chairman and Chief Executive Officer, (i) the median of the annual total compensation of all the Company’s employees was approximately $117,500, and (ii) the median of the annual total compensation of the Company’s full-time U.S. employees who worked for the Company for the entire year, who comprised approximately 90% of its U.S. workforce, was approximately $128,000.
As calculated and reported in the Company’s most recent Proxy Statement filed in April 2025, excluding the Company’s Chairman and Chief Executive Officer, (i) the median of the annual total compensation of all the Company’s employees was approximately $121,000, and (ii) the median of the annual total compensation of the Company’s full-time U.S. employees who worked for the Company for the entire year, who comprised approximately 90% of its U.S. workforce, was approximately $131,000.
Deferred acquisition costs (DAC) Incremental direct costs of acquired and renewal insurance contracts, consisting of commissions (other than contingent commissions) and premium-related taxes that are deferred and amortized to achieve a matching of revenues and expenses when reported in financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
Deductible The amount of loss that an insured retains. Deferred acquisition costs (DAC) Incremental direct costs of acquired and renewal insurance contracts, consisting of commissions (other than contingent commissions) and premium-related taxes that are deferred and amortized to achieve a matching of revenues and expenses when reported in financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
The outlook for all ratings is stable. INVESTMENT OPERATIONS The majority of funds available for investment are deployed in a widely diversified portfolio of high quality, liquid, taxable U.S. government, tax-exempt and taxable U.S. municipal and taxable corporate and U.S. agency mortgage-backed bonds.
INVESTMENT OPERATIONS The majority of funds available for investment are deployed in a widely diversified portfolio of high quality, liquid, taxable U.S. government, tax-exempt and taxable U.S. municipal and taxable corporate and U.S. agency mortgage-backed bonds.
As part of these changes, insurance holding company regulations were amended to require insurers who are part of a holding company system to file an enterprise risk report to provide the lead insurance regulator with a summary of the company’s 28 Enterprise Risk Management (ERM) framework, including the material risks within the insurance holding company system that could pose risk to the insurance entities within the holding company system.
Insurance holding company regulations require insurers who are part of a holding company system to file an enterprise risk report to provide the lead insurance regulator with a summary of the company’s Enterprise Risk Management (ERM) framework, including the material risks within the insurance holding company system that could pose risk to the insurance entities within the holding company system.
Pricing and Underwriting Pricing of the Company’s property and casualty insurance products is generally developed based upon an estimation of expected losses, the expenses associated with producing, issuing and servicing business and managing claims, the time value of money related to the expected loss and expense cash flows, and a reasonable profit margin that considers the capital needed to support the Company’s business.
See note 1 of the notes to the consolidated financial statements. 3 Pricing and Underwriting Pricing of the Company’s property and casualty insurance products is generally developed based upon an estimation of expected losses, the expenses associated with producing, issuing and servicing business and managing claims, the time value of money related to the expected loss and expense cash flows, and a reasonable profit margin that considers the capital needed to support the Company’s business.
The Company conducts reviews of its risk and catastrophe coverages on a regular basis and makes changes as it deems appropriate. The following discussion summarizes the Company’s catastrophe reinsurance coverage at January 1, 2025. Corporate Catastrophe Excess-of-Loss Reinsurance Treaty.
The Company conducts reviews of its risk and catastrophe coverages on a regular basis and makes changes as it deems appropriate. The following discussion summarizes the Company’s catastrophe reinsurance coverage as of J anuary 1, 2026. Corporate Catastrophe Excess-of-Loss Reinsurance Treaty.
For events up to and including May 24, 2025, this treaty provides up to $575 million of coverage, subject to a $2.8 billion retention.
For events up to and including May 24, 2026, this treaty provides up to $575 million of coverage, subject to a $2.89 billion retention.
At December 31, 2024, contractholder payables on unpaid losses within the deductible layer of large deductible policies were approximately $3.19 billion, and the associated receivables (net of allowance for expected credit losses) were approximately $3.17 billion. Business Insurance also utilizes retrospectively rated policies for a portion of its business, primarily for workers’ compensation coverage.
As of December 31, 2025, contractholder payables on unpaid losses within the deductible layer of large deductible policies were approximately $3.03 billion, and the associated receivables (net of allowance for expected credit losses) were approximately $3.01 billion. Business Insurance also utilizes retrospectively rated policies for a portion of its business, primarily for workers’ compensation coverage.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRISK FACTORS You should carefully consider the following risks and all of the other information set forth in this report, including without limitation our consolidated financial statements and the notes thereto and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates.” The following risk factors have been organized by category for ease of use; however, many of the risks may have impacts in more than one category.
Biggest changeRISK FACTORS You should carefully consider the following risks and all of the other information set forth in this report, including without limitation our consolidated financial statements and the notes thereto and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates.” The following risk factors have been organized by category for ease of use; however, many of the risks may have impacts in more than one category. 41 Insurance-Related Risks High levels of catastrophe losses, including as a result of factors such as increased concentrations of insured exposures in catastrophe-prone areas and changing climate conditions, could materially and adversely affect our results of operations, our financial position and/or liquidity, and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance.
These additional liabilities or increases in estimates, or a range of either, could vary significantly from period to period and could materially and adversely affect our results of operations and/or our financial position.
These additional liabilities or increases in estimates, or a range of either, could vary significantly from period to period and could materially and adversely affect our results of operations and/or our financial position.
See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Catastrophe Modeling.” We are subject to additional risks associated with our business outside the United States. We conduct business outside the United States primarily in Canada, the United Kingdom and the Republic of Ireland.
See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Catastrophe Modeling.” We are subject to additional risks associated with our business outside the United States. We conduct business outside the United States primarily in the United Kingdom, the Republic of Ireland and Canada.
The compromise of personal, confidential or proprietary information could also subject us to significant legal liability or regulatory action under evolving cyber-security, data protection and privacy laws and regulations enacted by the U.S. federal and state governments, Canada, the European Union or other jurisdictions or by various regulatory organizations or exchanges.
The compromise of personal, confidential or proprietary information could also subject us to significant legal liability or regulatory action under evolving cyber-security, data protection and privacy laws and regulations enacted by the U.S. federal and state governments, the European Union, Canada or other jurisdictions or by various regulatory organizations or exchanges.
See also “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook.” The value of our fixed maturity and short-term investments is also 47 subject to the risk that certain investments may default or become impaired due to a deterioration in the financial condition of one or more issuers of the securities held in our portfolio, or due to a deterioration in the financial condition of an insurer that guarantees an issuer’s payments of such investments.
See also “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook.” The value of our fixed maturity and short-term investments is also subject to the risk that certain investments may default or become impaired due to a deterioration in the financial condition of one or more issuers of the securities held in our portfolio, or due to a deterioration in the financial condition of an insurer that guarantees an issuer’s payments of such investments.
The estimation of loss reserves may also be more difficult during extreme events, such as a pandemic, or during volatile or uncertain economic conditions, due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties, increased frequency of small claims or delays in the reporting or adjudication of claims.
The estimation of loss reserves may also be more difficult 43 during extreme events, such as a pandemic, or during volatile or uncertain economic conditions, due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties, increased frequency of small claims or delays in the reporting or adjudication of claims.
In the past, certain reinsurers have ceased writing business and entered into runoff. Some of our reinsurance claims may be disputed by the reinsurers, and we may ultimately receive partial or no payment. This is a particular risk in the case of claims that relate to insurance policies written many years ago, including those relating to asbestos and environmental claims.
In the past, certain reinsurers have ceased writing business and entered into runoff. Some of our reinsurance claims may be disputed by the reinsurers, and we may ultimately receive partial or no payment. This is a particular risk in the case of claims that relate to insurance policies written many years ago, including those relating to asbestos claims.
If our controls, or the controls of our joint ventures or recently acquired businesses, are not effective (including with respect to the prevention or identification of misconduct by employees or others with whom we do business), it could lead to financial loss, unanticipated risk exposure (including underwriting, credit and investment risk), errors in financial reporting, litigation, regulatory proceedings and/or damage to our reputation.
If our controls, or the controls of our joint ventures or recently 54 acquired businesses, are not effective (including with respect to the prevention or identification of misconduct by employees or others with whom we do business), it could lead to financial loss, unanticipated risk exposure (including underwriting, credit and investment risk), errors in financial reporting, litigation, regulatory proceedings and/or damage to our reputation.
For a discussion of loss reserves by product line, including examples of common factors that can affect reserves, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates—Claims and Claim Adjustment Expense Reserves.” Our business could be harmed because of our continued exposure to asbestos and environmental claims and related litigation.
For a discussion of loss reserves by product line, including examples of common factors that can affect reserves, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates—Claims and Claim Adjustment Expense Reserves.” Our business could be harmed because of our continued exposure to asbestos claims and related litigation.
If we and our business partners are not able to successfully attract, train, retain and motivate our respective employees, our business, financial results and reputation could be materially and adversely affected. 51 Disruptions to our relationships with our independent agents and brokers or our inability to manage effectively a changing distribution landscape could adversely affect us .
If we and our business partners are not able to successfully attract, train, retain and motivate our respective employees, our business, financial results and reputation could be materially and adversely affected. Disruptions to our relationships with our independent agents and brokers or our inability to manage effectively a changing distribution landscape could adversely affect us .
These changes may impact the duration, diversification, volatility, and risk of our investment portfolio. 48 Because of the risks set forth above, the value of our investment portfolio could decrease, we could experience reduced net investment income and we could experience realized and/or unrealized investment losses, which could materially and adversely affect our results of operations, financial position and/or liquidity.
These changes may impact the duration, diversification, volatility, and risk of our investment portfolio. Because of the risks set forth above, the value of our investment portfolio could decrease, we could experience reduced net investment income and we could experience realized and/or unrealized investment losses, which could materially and adversely affect our results of operations, financial position and/or liquidity.
Similarly, comparative rating technology has impacted competition in personal lines and is now being used to access comparative rates for small commercial business as well, and that 50 trend is likely to continue and may accelerate. In recent years, there have been new entrants into the small commercial business, and this trend may continue.
Similarly, comparative rating technology has impacted competition in personal lines and is now being used to access comparative rates for small commercial business as well, and that trend is likely to continue and may accelerate. In recent years, there have been new entrants into the small commercial business, and this trend may continue.
State and Federal Regulation—Regulatory and Legislative Responses to Catastrophes.” The estimation of claims and claim adjustment expense reserves related to catastrophe losses can be affected by, among other things, the nature of the information available at the time of estimation, coverage issues, and legal, regulatory and economic uncertainties.
State and Federal Regulation—Regulatory and Legislative Responses to Catastrophes.” 42 The estimation of claims and claim adjustment expense reserves related to catastrophe losses can be affected by, among other things, the nature of the information available at the time of estimation, coverage issues, and legal, regulatory and economic uncertainties.
In addition, because our systems increasingly interface with and depend on third-party systems, including cloud-based, we could experience service denials or failures of controls if demand for our service exceeds capacity or a third-party system fails or experiences an interruption.
In addition, because our systems increasingly interface with and depend on third-party systems, including cloud-based systems, we could experience service denials or 52 failures of controls if demand for our service exceeds capacity or a third-party system fails or experiences an interruption.
These variables can be affected by both internal and external events, such as: changes in claims handling procedures, including automation; adverse changes in loss cost trends, including inflationary pressures, technology or other changes that may impact medical, auto and home repair costs (e.g., more costly technology in vehicles, labor shortages, supply chain disruptions, higher costs of used vehicles and parts, and increased demand 44 and decreased supply for raw materials, all of which results in increased severity of claims); economic conditions, including general and wage inflation; legal trends, including adverse changes in the tort environment that have continued to persist at elevated levels for a number of years (e.g., increased and more aggressive attorney involvement in insurance claims, increased litigation, expanded theories of liability, higher jury awards, lawsuit abuse and third-party litigation finance, among others); labor shortages, which can result in companies hiring less experienced workers; higher interest rates, which can result in higher post-judgment interest costs; and legislative changes, among others.
These variables can be affected by both internal and external events, such as: changes in claims handling procedures, including automation; adverse changes in loss cost trends, including inflationary pressures, technology or other changes that may impact medical, auto and home repair costs (e.g., more costly technology in vehicles, labor shortages, supply chain disruptions, higher costs of used vehicles and parts, and increased demand and decreased supply for raw materials, all of which result in increased severity of claims); economic conditions, including general and wage inflation; legal trends, including adverse changes in the tort environment that have continued to persist at elevated levels for a number of years (e.g., increased and more aggressive attorney involvement in insurance claims, increased litigation, expanded theories of liability, higher jury awards, lawsuit abuse and third-party litigation finance, among others); companies hiring less experienced workers, which can increase claims; higher interest rates, which can result in higher post-judgment interest costs; and legislative changes, among others.
Uncertainties surrounding the final resolution of these asbestos and environmental claims continue, and it is difficult to estimate our ultimate liability for such claims and related litigation. As a result, these reserves are subject to revision as new information becomes available and as claims develop.
Uncertainties surrounding the final resolution of these asbestos claims continue, and it is difficult to estimate our ultimate liability for such claims and related litigation. As a result, these reserves are subject to revision as new information becomes available and as claims develop.
The increased risks identified above could expose us to data loss or manipulation, disruption of service, monetary and reputational damages, competitive disadvantage and significant increases in compliance costs and costs to improve the security and resiliency of our computer systems.
The increased risks identified above could expose us to data loss or manipulation, disruption of service, monetary and reputational damages, competitive disadvantage and significant increases in compliance costs and costs to improve the security and resiliency of our computer systems and networks.
While there is substantial uncertainty as to the timing of any impact, in the case of driverless vehicles in particular, new legal frameworks or business practices could be adopted that reduce the size of the auto insurance market.
While there is substantial uncertainty as to the timing of 49 any impact, in the case of driverless vehicles in particular, new legal frameworks or business practices could be adopted that reduce the size of the auto insurance market.
These efforts may require us to make substantial expenditures and not be successful, and even if successful, they may create additional risks: • Changes to our business processes or workflow, including the use of new technologies, may give rise to execution risk; • Models underlying automated underwriting and pricing decisions may not be effective; • Demand for new products or expansion into new markets may not meet our expectations; • New products or services and expansion into new markets may change our risk exposures, and the data and models we use to manage such exposures may not be as effective as those we use in existing markets or with existing products; • Acquisitions may not be successfully integrated, resulting in substantial disruption, costs or delays and adversely affecting our ability to compete, may not result in the benefits anticipated by us, and may also result in unforeseen liabilities or impact our credit ratings; and • The conversion of policyholders to a new product could negatively impact retention and profit margins.
These efforts may require us to make substantial expenditures and not be successful, and even if successful, they may create additional risks: • Changes to our business processes or workflow, including the use of new technologies, may give rise to execution risk; • Models underlying automated underwriting and pricing decisions may not be effective; • Demand for new products or expansion into new markets may not meet our expectations; • New products or services and expansion into new markets may change our risk exposures, and the data and models we use to manage such exposures may not be as effective as those we use in existing markets or with existing products; 50 • Acquisitions or dispositions may not be successfully integrated or separated, resulting in substantial disruption, costs or delays and adversely affecting our ability to compete, may not result in the benefits anticipated by us, and may also result in unforeseen liabilities or impact our credit ratings; and • The conversion of policyholders to a new product could negatively impact retention and profit margins.
Failure to comply with local laws in a particular market may result in substantial liability and could have a significant and negative effect not only on our business in that market but also on our reputation generally.
Failure to comply with local laws in a particular market may 51 result in substantial liability and could have a significant and negative effect not only on our business in that market but also on our reputation generally.
The ability of our insurance subsidiaries to pay dividends to our holding company is also restricted by regulations that set standards of solvency that must be met and maintained.
The 48 ability of our insurance subsidiaries to pay dividends to our holding company is also restricted by regulations that set standards of solvency that must be met and maintained.
It is also not possible to predict changes in the legal, regulatory and legislative environment and their impact on the future development of asbestos and environmental claims.
It is also not possible to predict changes in the legal, regulatory and legislative environment and their impact on the future development of asbestos claims.
We face exposure to mass tort claims, including claims related to exposure to potentially harmful products or substances, such as perfluoroalkyl and polyfluoroalkyl substances (PFAS), talc, opioids and lead.
We face exposure to mass tort claims, including claims related to exposure to 44 potentially harmful products or substances, such as perfluoroalkyl and polyfluoroalkyl substances (PFAS), talc, opioids and lead.
Like other global companies, our computer systems are regularly subject to and will continue to be the target of computer viruses, malware or other malicious codes (including ransomware), unauthorized access, cyber-attacks or other computer- 54 related penetrations. The Company, like other property and casualty insurers, may be under greater threat from cybercriminals seeking sensitive personal or other insurance-related information.
Like other global companies, our computer systems and networks are regularly subject to and will continue to be the target of computer viruses, malware or other malicious codes (including ransomware), unauthorized access, cyber-attacks or other computer-related penetrations. The Company, like other property and casualty insurers, may be under greater threat from cybercriminals seeking sensitive personal or other insurance-related information.
For a further discussion of risks that can impact us as a result of financial market disruption or an economic downturn, see “During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected” above and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook.” Technology and Intellectual Property Risks Our business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology, particularly as our business processes become more digital.
For a further discussion of risks that can impact us as a result of financial market disruption or an economic downturn, see “During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected” above and “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook.” Technology and Intellectual Property Risks Our business success and profitability depend, in part, on effective information technology systems and on continuing to develop and implement improvements in technology, including artificial intelligence, particularly as our business processes become more digital.
Business and Operational Risks The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.
Business and Operational Risks The intense competition that we face, including with respect to attracting and retaining employees, and the impact of innovation, technological change, including with respect to artificial intelligence, and changing customer preferences on the insurance industry and the markets in which we operate, could harm our ability to maintain or increase our business volumes and our profitability.
From time to time, to protect and grow market share and/or improve our productivity and efficiency, we invest in strategic initiatives and pursue acquisitions.
From time to time, to protect and grow market share and/or improve our productivity and efficiency, we invest in strategic initiatives and pursue acquisitions or dispositions.
Severe weather events over the last two decades have underscored the unpredictability of climate trends. For example, the frequency and/or severity of hurricane, tornado, hail and wildfire events in the United States have been more volatile during this time period.
Severe weather events over the last few decades have underscored the unpredictability of climate trends. For example, the frequency and/or severity of hurricane, tornado, hail and wildfire events in the United States have been more volatile during this time period.
See the “Asbestos Claims and Litigation,” “Environmental Claims and Litigation” and “Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves” sections of “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Also see “Item 3—Legal Proceedings.” We are exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances.
See the “Asbestos Claims and Litigation” and “Uncertainty Regarding Adequacy of Asbestos Reserves” sections of “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Also see “Item 3—Legal Proceedings.” We are exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances.
Investment returns are an important part of our overall profitability. Fixed maturity and short-term investments comprised approximately 94% of the carrying value of our investment portfolio as of December 31, 2024. Changes in interest rates affect the carrying value of our fixed maturity investments and returns on our fixed maturity and short-term investments.
Investment returns are an important part of our overall profitability. Fixed maturity and short-term investments comprised approximately 94% of the carrying value of our investment portfolio as of December 31, 2025. Changes in interest rates affect the carrying value of our fixed maturity investments and returns on our fixed maturity and short-term investments.
Even with proper controls in place, actual or alleged errors or inaccuracies by our agents could result in our involvement in disputes, litigation or regulatory actions. Our efforts to develop new products or services, expand in targeted markets, improve business processes and workflows or make acquisitions may not be successful and may create enhanced risks.
Even with proper controls in place, actual or alleged errors or inaccuracies by our agents could result in our involvement in disputes, litigation or regulatory actions. Our efforts to develop new products or services, expand in targeted markets, improve business processes and workflows or pursue acquisitions or dispositions may not be successful and may create enhanced risks.
COVID-19 presented, and any future pandemics (including new variants of COVID-19) could present, the following risks, among others: inflation; supply chain disruption; labor shortages; backlogs in the court system (which increase the time and costs to resolve claims); legal and regulatory demands for rate refunds; behavioral changes that can result in the increased frequency and severity of claims, such as driving at faster speeds; medical conditions such as “long-COVID” and other claims in our workers compensation line; litigation seeking business interruption coverage; reduced earned premiums; higher claims and claim adjustment expenses in certain lines of business; adverse legislative or regulatory actions; operational disruptions; increased general and administrative expenses; financial market disruption; and an economic downturn.
The pandemic presented, and any future pandemics could present, the following risks, among others: inflation; supply chain disruption; labor shortages; backlogs in the court system (which increase the time and costs to resolve claims); legal and regulatory demands for rate refunds; behavioral changes that can result in the increased frequency and severity of claims, such as driving at faster speeds; medical conditions such as “long-COVID” and other claims in our workers compensation line; litigation seeking business interruption coverage; reduced earned premiums; higher claims and claim adjustment expenses in certain lines of business; adverse legislative or regulatory actions; operational disruptions; increased general and administrative expenses; financial market disruption; and an economic downturn.
If we do not anticipate, keep pace with and adapt to technological and other changes impacting the insurance industry, it will harm our ability to compete, decrease the value of our products to customers, and materially and adversely affect our business.
If we do not anticipate, keep pace with and adapt to technological and other changes impacting the insurance industry, including artificial intelligence, it will harm our ability to compete, decrease the value of our products to customers, and materially and adversely affect our business.
These regulatory systems also address authorization for lines of business, statutory capital and surplus requirements, limitations on the types and amounts of certain investments, underwriting limitations, transactions with affiliates, dividend limitations, changes in control, premium rates and a variety of other financial and non-financial components of an insurer’s business including, recently, cyber-security.
These regulatory systems also address authorization for lines of business, statutory capital and surplus requirements, limitations on the types and amounts of certain investments, underwriting limitations, transactions with affiliates, dividend limitations, changes in control, premium rates and a variety of other financial and non-financial components of an insurer’s business including, recently, cyber-security and the use of artificial intelligence and models.
Traditional insurance industry participants, technology companies, “InsurTech” companies, some of which are supported by traditional insurance industry participants, and others are focused on using technology and innovation to simplify and improve the customer experience, increase efficiencies, redesign products, alter business or distribution models and effect other potentially disruptive changes in the insurance industry.
Traditional insurance industry participants, technology companies, “InsurTech” companies, some of which are supported by traditional insurance industry participants, and others are focused on using technology and innovation to simplify and improve the customer experience, increase efficiencies, redesign products, alter business or distribution models, create more sophisticated pricing models and effect other potentially disruptive changes in the insurance industry.
As a result, our business success is dependent on maintaining the effectiveness of existing technology systems and on continuing to develop and enhance technology systems that support our business processes and strategic initiatives in an efficient manner, particularly as our business processes become more digital and seek to incorporate artificial intelligence, and certain of our products, such as cyber insurance, are more technology-based.
As a result, our business success is dependent on maintaining the effectiveness of existing technology systems and on continuing to develop and enhance technology systems that support our business processes and strategic initiatives in an efficient manner, particularly as our business processes become more digital and seek to incorporate artificial intelligence, which has a high rate of change, and certain of our products, such as cyber insurance, are more technology-based.
For example, our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence and machine learning that collects and analyzes a wide variety of data points (so-called “big data” analysis) to make underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use or deploy artificial intelligence to create efficiencies in ways that we do not.
For example, our competitive position could be impacted if we are unable to deploy, in a cost effective and competitive manner, technology such as artificial intelligence and machine learning that collects and analyzes a wide variety of data points to help make underwriting or other decisions, or if our competitors collect and use data which we do not have the ability to access or use or deploy artificial intelligence to create efficiencies in ways that we do not.
Examples of such claims and coverage issues include, but are not limited to: • judicial expansion of policy coverage and the impact of new or expanded theories of liability; • plaintiffs targeting insurers in purported class action litigation relating to claims handling and other practices; • claims relating to construction defects, which often present complex coverage and damage valuation questions; • claims related to data and network security breaches, information system failures or cyber events, including cases where coverage was not intended to be provided; • the assertion of “public nuisance” or similar theories of liability, pursuant to which plaintiffs, including governmental entities, seek to recover monies spent to respond to harm caused to members of the public, abate hazards to public health and safety and/or recover expenditures purportedly attributable to a “public nuisance,” such as litigation against manufacturers or distributors of lead paint, opioids, perfluoroalkyl and polyfluoroalkyl substances (PFAS) and other allegedly harmful products, and entities that caused or contributed to harm to the environment; 46 • claims related to liability, business interruption or workers’ compensation arising out of infectious disease or pandemic; • claims related to vaccine mandates; • claims relating to abuse by an employee or a volunteer of an insured; • claims that link health issues to particular causes (for example, cumulative traumatic head injury from sports or other causes), resulting in liability or workers’ compensation claims; • claims arising out of modern techniques and practices used in connection with the extraction of natural resources, such as hydraulic fracturing or wastewater injection; • claims arising out of the use of personal property in commercial transactions, such as ride or home sharing; • claims against fiduciaries of retirement plans, including allegations regarding excessive fees; • claims under laws protecting biometric and other personal data; • claims relating to consequences of current or new technologies, including generative AI or addictive software, or business models or processes, including as a result of related behavioral changes; • claims relating to changing climate conditions, including claims alleging that our policyholders cause or contribute to changing climate conditions; and • bankruptcies of policyholders or other insurers, which can lead to inflated numbers and values of claims.
Examples of such claims and coverage issues include, but are not limited to: • judicial expansion of policy coverage and the impact of new or expanded theories of liability; • plaintiffs targeting insurers in purported class action litigation relating to claims handling and other practices; • claims relating to construction defects, which often present complex coverage and damage valuation questions; • claims related to data and network security breaches, information system failures or cyber events, including cases where coverage was not intended to be provided; • the assertion of “public nuisance” or similar theories of liability, pursuant to which plaintiffs, including governmental entities, seek to recover monies spent to respond to harm caused to members of the public, abate hazards to public health and safety and/or recover expenditures purportedly attributable to a “public nuisance,” such as litigation against manufacturers or distributors of lead paint, opioids, perfluoroalkyl and polyfluoroalkyl substances (PFAS) and other allegedly harmful products, and entities that caused or contributed to harm to the environment; • claims related to liability, business interruption or workers’ compensation arising out of infectious disease or pandemic; • claims relating to abuse by an employee or a volunteer of an insured; • claims that link health issues to particular causes (for example, cumulative traumatic head injury from sports or other causes), resulting in liability or workers’ compensation claims; • expansion of compensable workers’ compensation claims; • claims arising out of the use of personal property in commercial transactions, such as ride or home sharing; • claims against fiduciaries of retirement plans, including allegations regarding excessive fees; • claims under laws protecting biometric and other personal data; • claims relating to consequences of current or new technologies, including artificial intelligence or addictive software, or business models or processes, including as a result of related behavioral changes; • claims relating to changing climate conditions, including claims alleging that our policyholders cause or contribute to changing climate conditions; and • bankruptcies of policyholders or other insurers, which can lead to inflated numbers and values of claims.
These efforts could include seeking improved rates or improved terms and conditions, and could also include other initiatives, such as reducing operating expenses and acquisition costs. These efforts may not be successful and/or may result in lower business volumes.
These efforts could include seeking improved rates or improved terms and conditions, and could also include other initiatives, such as reducing operating expenses and acquisition costs, and introducing new product offerings. These efforts may not be successful and/or may result in lower business volumes.
Our estimated deductible under the program is $3.85 billion for 2025. For a further description of the Terrorism Risk Insurance Program, see note 6 of the notes to the consolidated financial statements. Because of the risks set forth above, catastrophes could materially and adversely affect our results of operations, financial position and/or liquidity.
Our estimated deductible under the program is $4.01 billion for 2026. For a further description of the Terrorism Risk Insurance Program, see note 6 of the notes to the consolidated financial statements. Because of the risks set forth above, catastrophes could materially and adversely affect our results of operations, financial position and/or liquidity.
Resulting legislative or regulatory actions or litigation could result in negative publicity and/or generate adverse rules or findings, such as curtailing the use of important underwriting criteria, or other data or methodologies, which could materially and adversely affect our results of operations. 53 Future pandemics (including new variants of COVID-19), could materially affect our results of operations, financial position and/or liquidity.
Resulting legislative or regulatory actions or litigation could result in negative publicity and/or generate adverse rules or findings, such as curtailing the use of important underwriting criteria, or other data or methodologies, which could materially and adversely affect our results of operations. Future pandemics could materially affect our results of operations, financial position and/or liquidity.
Residual markets have resulted in, and may in the future result in, significant losses or assessments to insurers, including us. For example, it is expected that the January 2025 California wildfires will result in assessments to insurers from the California FAIR Plan.
Residual markets have resulted in, and may in the future result in, significant losses or assessments to insurers, including us. For example, the January 2025 California wildfires resulted in assessments to insurers from the California FAIR Plan.
States have from time to time passed legislation, and regulators have taken action, that have the effect of limiting the ability of insurers to manage catastrophe risk, such as by restricting insurers from reducing exposures or withdrawing from catastrophe-prone areas or mandating that insurers participate in residual markets.
States have from time to time passed legislation, and regulators have taken action, that have the effect of limiting the ability of insurers to manage catastrophe risk, such as by restricting insurers from reducing exposures or withdrawing from catastrophe-prone areas, limiting insurers’ ability to increase prices, requiring price reductions or discounts or mandating that insurers participate in residual markets.
Well-capitalized new entrants to the property and casualty insurance and reinsurance industries and existing competitors that receive substantial infusions of capital may conduct business in ways that adversely impact our business volumes and profitability.
Well-capitalized new entrants to the property and casualty insurance and reinsurance industries, including entities backed by private equity, and existing competitors that receive substantial infusions of capital may conduct business in ways that adversely impact our business volumes and profitability.
In the event of a computer virus or natural or other disaster, our systems could be inaccessible for an extended period of time, including as a result of hostile actions taken by nation-states or terrorist organizations.
In the event of a cyber-attack, malware or natural or other disaster, our systems could be inaccessible for an extended period of time, including as a result of hostile actions taken by cyber criminals, nation-states or terrorist organizations.
See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Catastrophe Modeling” and “—Changing Climate Conditions.” In addition, for newer and rapidly evolving products, such as cyber insurance, limited historical loss experience and the potential for a widespread cyber event decrease the efficacy of modeling tools and increase the level of uncertainty related to the product, and as a result, the inherent potential for unexpected material economic loss. 43 The extent of losses from a catastrophe is a function of the total amount of insured exposure affected by the event, the severity of the event and the coverage provided.
See “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Catastrophe Modeling” and “—Changing Climate Conditions.” In addition, for newer and rapidly evolving products, such as cyber insurance, limited historical loss experience and the potential for a widespread cyber event decrease the efficacy of modeling tools and increase the level of uncertainty related to the product, and as a result, the inherent potential for unexpected material economic loss.
The risk of cyber attacks could be exacerbated by geopolitical tensions, including hostile actions taken by nation-states or terrorist organizations. While we have experienced cyber-attacks, to date, we are not aware that we have experienced a material cyber-security breach.
The risk of cyber-attacks could be exacerbated by geopolitical tensions, including hostile actions taken by cyber criminals, nation-states or terrorist organizations, and the increased use of artificial intelligence by threat actors to perpetrate these attacks. While we have experienced cyber-attacks, to date, we are not aware that we have experienced a material cyber-security breach.
Our portfolio has benefited from tax exemptions (such as those related to interest from municipal bonds) and certain other tax laws, including, but not limited to, those governing dividends-received deductions and tax credits. Changes in these laws could adversely impact the value of our investment portfolio.
Our portfolio has benefited from tax exemptions (such as those related to interest from municipal bonds) and certain other tax laws, including, but not limited to, those governing dividends-received deductions and tax credits.
See note 17 of the notes to the consolidated financial statements. Our exposure to the above credit risks could materially and adversely affect our results of operations. A downgrade in our claims-paying and financial strength ratings could adversely impact our business volumes, adversely impact our ability to access the capital markets and increase our borrowing costs.
Our exposure to the above credit risks could materially and adversely affect our results of operations. A downgrade in our claims-paying and financial strength ratings could adversely impact our business volumes, adversely impact our ability to access the capital markets and increase our borrowing costs. Claims-paying and financial strength ratings are important to an insurer’s competitive position.
Financial, Economic and Credit Risks During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected. If financial markets experience significant disruption or if economic conditions deteriorate, such as in a period of recession or stagflation, our results of operations, financial position and/or liquidity likely would be adversely impacted.
If financial markets experience significant disruption or if economic conditions deteriorate, such as in a period of recession or stagflation, our results of operations, financial position and/or liquidity likely would be adversely impacted.
If we experience difficulties with technology, data and network security (including as a result of cyber attacks), outsourcing relationships or cloud-based technology, our ability to conduct our business could be negatively impacted.
If, as a result of a cyber-attack (the risk of which could be exacerbated by geopolitical tensions) or otherwise, we experience difficulties with technology, data and network security, outsourcing relationships or cloud-based technology, our ability to conduct our business could be negatively impacted.
State, federal and international regulators are also increasingly focused on imposing new reporting and other requirements, which in some cases can be conflicting, on a multitude of topics.
State, federal and international regulators are also increasingly focused on imposing new reporting and other requirements, which in some cases can be conflicting, on a multitude of topics. Regarding artificial intelligence, legal and regulatory frameworks are developing and subject to change.
Experts providing input to the various estimates and underlying assumptions include actuaries, underwriters, claim personnel and lawyers, as well as other members of management. Therefore, management often considers varying individual viewpoints as part of its estimation of loss reserves.
This risk may be exacerbated in the context of an extreme event or an acquisition. Experts providing input to the various estimates, models and underlying assumptions include actuaries, underwriters, claim personnel and lawyers, as well as other members of management. Therefore, management often considers varying individual viewpoints as part of its estimation of loss reserves.
Claims-paying and financial strength ratings are important to an insurer’s competitive position. A downgrade in one or more of our ratings could negatively impact our business volumes or make it more difficult or costly for us to access the capital markets or borrow money.
A downgrade in one or more of our ratings could negatively impact our business volumes or make it more difficult or costly for us to access the capital markets or borrow money.
Similarly, the potential for losses from a cyber event can be magnified to the extent that the event impacts geographies, platforms, systems or vulnerabilities shared by a large number of policyholders, such as cloud-based software platforms.
Similarly, the potential for losses from a cyber event can be magnified to the extent that the event impacts geographies, platforms, systems or vulnerabilities shared by a large number of policyholders, such as cloud-based software platforms, or in the event threat actors continue to expand their use of new and developing technologies, including artificial intelligence.
The Company has been, and continues to be, involved in litigation involving insurance coverage issues pertaining to asbestos and environmental claims. The Company believes that some court decisions have interpreted the insurance coverage to be broader than the original intent of the insurers and policyholders. These decisions continue to be inconsistent and vary from jurisdiction to jurisdiction.
The Company believes that some court decisions have interpreted the insurance coverage to be broader than the original intent of the insurers and policyholders. These decisions continue to be inconsistent and vary from jurisdiction to jurisdiction.
Our investment portfolio includes: residential mortgage-backed securities; collateralized mortgage obligations; pass-through securities and asset-backed securities collateralized by sub-prime mortgages; commercial mortgage-backed securities; and wholly-owned real estate and real estate partnerships, all of which could be adversely impacted by declines in real estate valuations, including as a result of changes in the use of commercial office and retail space since the COVID-19 pandemic.
Changes in these laws could adversely impact the value of our investment portfolio. 46 Our investment portfolio includes: residential mortgage-backed securities; collateralized mortgage obligations; pass-through securities and asset-backed securities collateralized by sub-prime mortgages; commercial mortgage-backed securities; and wholly-owned real estate and real estate partnerships, all of which could be adversely impacted by declines in real estate valuations.
In addition, as the number of third-party models increases, it becomes more difficult to validate, manage and integrate such models as they evolve over time, and the risk associated with assimilating the output from such models into our decisions increases. 52 If we fail to appropriately price the risks we insure or fail to change our pricing models to appropriately reflect our experience, or if our claims experience is more frequent or severe than our underlying risk assumptions, for example due to inflation, changing climate conditions, legislative or regulatory changes, changes in behavior such as distracted or faster driving or a more aggressive tort environment, our profit margins may be negatively affected.
If we fail to appropriately price the risks we insure or fail to change our pricing models to appropriately reflect our experience, or if our claims experience is more frequent or severe than our underlying risk assumptions, for example due to inflation, changing climate conditions, legislative or regulatory changes, changes in behavior such as distracted or faster driving or a more aggressive tort environment, our profit margins may be negatively affected.
The effects of these and other unforeseen emerging claim and coverage issues are extremely hard to predict and could harm our business and materially and adversely affect our results of operations and/or our financial position.
The effects of these and other unforeseen emerging claim and coverage issues are extremely hard to predict and could harm our business and materially and adversely affect our results of operations and/or our financial position. 45 Financial, Economic and Credit Risks During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected.
Moreover, certain policyholders purchase retrospectively rated policies (i.e., where premiums are adjusted after the policy period based on the actual loss experience of the policyholder during the policy period).
Moreover, certain policyholders purchase retrospectively rated policies (i.e., where premiums are adjusted after the policy period based on the actual loss experience of the policyholder during the policy period). Retrospectively rated policies expose us to additional credit risk to the extent that the adjusted premium is greater than the original premium.
Because of the risks set forth above, we may not be able to collect all amounts due to us from reinsurers, and reinsurance coverage may not be available to us in the future at commercially reasonable rates or terms, or at all, and/or life insurance companies may fail to make required annuity payments, and thus our results of operations could be materially and adversely affected.
In addition, the Covered Agreements between the U.S. and each of the EU and U.K. eliminate the requirement for European and U.K. reinsurers operating in the U.S. to provide collateral, which have made it more difficult for U.S. companies, including us, to obtain collateral from European and U.K. reinsurers. 47 Because of the risks set forth above, we may not be able to collect all amounts due to us from reinsurers, and reinsurance coverage may not be available to us in the future at commercially reasonable rates or terms, or at all, and/or life insurance companies may fail to make required annuity payments, and thus our results of operations could be materially and adversely affected.
In addition, if our underwriting is not effective, further efforts to increase rates could also lead to “adverse selection”, whereby accounts retained have higher losses, and are less profitable, than accounts lost.
Also, in some cases, if we do not write a particular product for an account, we could lose the ability to write other products for the same account. In addition, if our underwriting is not effective, further efforts to increase rates could also lead to “adverse selection”, whereby accounts retained have higher losses, and are less profitable, than accounts lost.
Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks. Computer viruses, hackers and employee or vendor misconduct, and other external hazards (such as social engineering attacks), could expose our data systems to security breaches, cyber-attacks or other disruptions.
Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks. Cyber-attacks and employee or vendor misconduct (inadvertent or intentional) could expose our systems or data to unauthorized parties or otherwise cause significant disruptions.
The sophistication of these threats continues to increase, and the preventative actions we take to reduce the risk of cyber incidents and protect our systems and information may be insufficient. In addition, new technology that could result in greater operational efficiency, including artificial intelligence, may further expose our computer systems to the risk of cyber-attacks.
In addition, new technology that could result in greater operational efficiency, including artificial intelligence, may further expose our computer systems and networks to the risk of cyber-attacks.
In addition, system development projects may not deliver the benefits or perform as expected, or may be replaced or become obsolete more quickly than expected, which could result in operational difficulties, additional costs or accelerated recognition of expenses. Attracting and retaining technology personnel has also become significantly more challenging in recent years.
In addition, system development projects may not deliver the benefits or perform as expected, or may be replaced or become obsolete more quickly than expected, which could result in operational difficulties, additional costs or accelerated recognition of expenses. Artificial intelligence, in particular, may become more expensive in the future given the resources necessary to develop that technology.
In recent years, certain entities have acquired patents in order to allege claims of infringement against companies, including in some cases, us. Any intellectual property infringement claims brought against us could cause us to spend significant time and money to defend ourselves, regardless of the merits of the claims.
Any intellectual property infringement claims brought against us could cause us to spend significant time and money to defend ourselves, regardless of the merits of the claims.
If any of our software vendors or licensors are faced with infringement claims, we may lose our ability to use such software until the dispute is resolved.
With respect to artificial intelligence, emerging intellectual property-related rights and issues are being interpreted by courts and addressed by regulations. If any of our software vendors or licensors are faced with infringement claims, we may lose our ability to use such software until the dispute is resolved.
Different experts may apply different assumptions and judgments when faced with material uncertainty, based on their individual backgrounds, professional experiences and areas of focus. As a result, these experts may at times produce estimates materially different from each other. This risk may be exacerbated in the context of an extreme event or an acquisition.
Additionally, models and technology are used in the claim estimation process, which can present risks of model inaccuracy. Different experts may apply different assumptions and judgments when faced with material uncertainty, based on their individual backgrounds, professional experiences and areas of focus. As a result, these experts may at times produce estimates materially different from each other.
Further, the intellectual property laws may not prevent our competitors from independently developing trademarks, products and services that are similar to ours. We may incur significant costs in our efforts to protect and enforce our intellectual property, including the initiation of expensive and protracted litigation, and we may not prevail.
Further, the intellectual property laws may not prevent our competitors from independently developing trademarks, products and services that are similar to ours.
For example, we may not be able to obtain collateral and any collateral obtained may subsequently have little or no value. In accordance with industry practice, when policyholders purchase insurance policies from us through independent agents and brokers, the premiums relating to those policies are often paid to the agents and brokers for payment to us.
In accordance with industry practice, when policyholders purchase insurance policies from us through independent agents and brokers, the premiums relating to those policies are often paid to the agents and brokers for payment to us. In most jurisdictions, the premiums will be deemed to have been paid to us whether or not they are actually received by us.
In most jurisdictions, the premiums will be deemed to have been paid to us whether or not they are actually received by us. Consequently, we assume a degree of credit risk associated with amounts due from independent agents and brokers. We are also exposed to credit risk related to certain guarantee or indemnification arrangements that we have with third parties.
Consequently, we assume a degree of credit risk associated with amounts due from independent agents and brokers. We are also exposed to credit risk related to certain guarantee or indemnification arrangements that we have with third parties. See note 17 of the notes to the consolidated financial statements.
If we cannot successfully redesign an infringing product, service or technology (or procure a substitute version), this could have a material adverse effect on our business and ability to compete. 55 Regulatory and Compliance Risks Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth.
Regulatory and Compliance Risks Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth.
Any inability to enforce our intellectual property rights could have a material adverse effect on our business and our ability to compete. We may be subject to claims by third parties from time to time that our products, services and technologies infringe on their intellectual property rights.
We may be subject to claims by third parties from time to time that our products, services and technologies infringe on their intellectual property rights. In recent years, certain entities have acquired patents in order to allege claims of infringement against companies, including in some cases, us.
Retrospectively rated policies expose us to additional credit risk to the extent that the adjusted premium is greater than the original premium. 49 Our efforts to mitigate the credit risk that we have to our insureds may not be successful.
Our efforts to mitigate the credit risk that we have to our insureds may not be successful. For example, we may not be able to obtain collateral and any collateral obtained may subsequently have little or no value.
It is possible that the filing of other direct actions against insurers, including us, could be made in the future. 45 We also continue to receive claims from policyholders who allege that they are liable for injury or damage arising out of their alleged disposition of toxic substances.
It is possible that the filing of other direct actions against insurers, including us, could be made in the future. As mentioned above, the Company has been, and continues to be, involved in litigation involving insurance coverage issues pertaining to asbestos claims.
Removed
Insurance-Related Risks High levels of catastrophe losses, including as a result of factors such as increased concentrations of insured exposures in catastrophe-prone areas and changing climate conditions, could materially and adversely affect our results of operations, our financial position and/or liquidity, and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance.
Added
The extent of losses from a catastrophe is a function of the total amount of insured exposure affected by the event, the severity of the event and the coverage provided.
Removed
Liability for investigation and cleanup of environmental contamination and for some related losses under federal laws, such as the Comprehensive Environmental Response, Compensation and Liability Act, and under similar state laws, may be imposed on certain parties even if they did not cause the release or threatened release of hazardous substances and may be joint and several with other responsible parties.
Added
In addition, as the number of third-party models increases, it becomes more difficult to validate, manage and integrate such models as they evolve over time, and the risk associated with assimilating the output from such models into our decisions increases.
Removed
In addition, the Covered Agreements between the U.S. and each of the EU and U.K. eliminate the requirement for European and U.K. reinsurers operating in the U.S. to provide collateral, which could make it more difficult for U.S. companies, including us, to obtain collateral from European and U.K. reinsurers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

14 edited+1 added−1 removed12 unchanged
Biggest changeFor example, the Company participates in threat intelligence information-sharing networks, such as the Financial Services Information Sharing and Analysis Center (FS-ISAC). The Company also tracks industry and government intelligence sources for information about evolving cyber threats and deploys updates to its systems, as appropriate. The Company’s Cybersecurity team monitors and investigates suspicious events.
Biggest changeThe Company also tracks industry and government intelligence sources for information about evolving cyber threats and deploys updates to its systems, as appropriate. The Company’s Cybersecurity team monitors and investigates suspicious events. Risk Assessment The Company performs an annual cybersecurity risk and control assessment as part of the Enterprise Risk Management team’s risk assessment processes.
These systems are designed, implemented and maintained with the goal of identifying, assessing and managing cybersecurity risks. In addition to its internal cybersecurity team, the Company uses internal and external auditors and, as appropriate, third-party consultants, service providers and assessors to review and test its processes.
These systems are designed, implemented and maintained with the goal of identifying, assessing and managing cybersecurity risks. In addition to its internal cybersecurity team, the Company uses internal and external auditors and, as appropriate, third-party consultants, service providers and assessors to review and test its processes and controls.
This analysis drives the Company’s long- and short-term strategies, which are executed through a collaborative effort within Technology, Cybersecurity and Business Resiliency and are communicated to the Risk Committee of the Board of Directors on a regular basis.
This analysis drives the Company’s long- and short-term strategies, which are executed through a collaborative effort within Technology, Cybersecurity and Business Resiliency and are communicated to the Risk Committee of the Board of Directors on a regular basis. 56
To help manage risk from potential cybersecurity threats, as part of the annual Code of Business Conduct and Ethics training, all Company employees receive data protection and privacy training, which focuses on the need to appropriately protect and secure confidential Company information. Additionally, the Company provides annual security awareness training that covers a broad range of security topics.
To help manage risk related to potential cybersecurity threats, as part of the annual Code of Business Conduct and Ethics training, all Company employees receive data protection and privacy training, which focuses on the need to appropriately protect and secure confidential Company information. Additionally, the Company provides annual security awareness training that covers a broad range of security topics.
These policies reinforce the data privacy and protection sections of the Company’s Code of Business Conduct and Ethics. The Company uses technologies and tools, as appropriate, to enhance cybersecurity, such as multifactor authentication, encryption, firewalls, intrusion detection and prevention systems, endpoint detection and response, vulnerability scanning, penetration testing, patch management and identity and access management systems.
These policies reinforce the data privacy and protection sections of the Company’s Code of Business Conduct and Ethics. The Company uses certain technologies and tools, as appropriate, to enhance cybersecurity, such as multifactor authentication, encryption, firewalls, intrusion prevention systems, endpoint detection and response, data loss prevention, vulnerability 55 scanning, penetration testing, patch management and identity and access management systems.
In addition, as part of their regular responsibilities, the Company’s Governance, Risk and Compliance officers within its Technology and Cybersecurity groups assess technology and cybersecurity risks by leveraging the Company’s risk framework related to technology and cybersecurity, which aligns with the Company’s enterprise risk management strategy.
In addition, as part of their regular responsibilities, the Company’s Risk and Security officers within its Technology and Cybersecurity groups assess technology and cybersecurity risks by leveraging the Company’s risk framework related to technology and cybersecurity, which aligns with the Company’s enterprise risk management strategy.
As the workforce, the work environment and the threat landscape continue to evolve, the Company seeks to evaluate related risks and implement appropriate controls. Risk Management The Company maintains cybersecurity policies and standards which align with the International Organization for Standardization (ISO) 27001 standard and the National Institute of Standards and Technology (NIST) Cybersecurity Framework.
As the workforce, the work environment and the threat landscape continue to evolve, the Company seeks to evaluate related risks and implement appropriate controls. Risk Management The Company maintains cybersecurity policies and standards that are modeled to align with the International Organization for Standardization (ISO) 27001 standard and the National Institute of Standards and Technology (NIST) Cybersecurity Framework.
See “Item 1A—Risk Factors—If we experience difficulties with technology, data and network security (including as a result of cyber attacks), outsourcing relationships or cloud-based technology, our ability to conduct our business could be negatively impacted.” Governance The Risk Committee of the Board, consistent with its charter, reviews and discusses with management the strategies, processes and controls pertaining to the management of the Company’s information technology operations, including cyber risks and cybersecurity.
See “Item 1A—Risk Factors—If, as a result of a cyber-attack (the risk of which could be exacerbated by geopolitical tensions) or otherwise, we experience difficulties with technology, data and network security, outsourcing relationships or cloud-based technology, our ability to conduct our business could be negatively impacted.” Governance The Risk Committee of the Company’s Board of Directors, consistent with its charter, reviews and discusses with management the strategies, processes and controls pertaining to the management of the Company’s information technology operations, including cyber risks and cybersecurity.
The Company’s Chief Technology and Operations Officer reviews and approves the list of emerging, strategic and transformative risks upon which the Enterprise Risk Management team’s cybersecurity risk and control assessment processes are based.
The Company’s Chief Technology and Operations Officer and the Chief Financial Officer of the Company’s Technology and Operations group review and approve the list of emerging, strategic and transformative risks upon which the Enterprise Risk Management team’s cybersecurity risk and control assessment processes are based.
As part of the Company’s supplier risk management program, using a risk-based approach, the Cybersecurity team conducts formal risk assessments with respect to certain of the Company’s third-party service providers. The assessment process addresses aspects of the service providers’ data security controls and policies.
To maintain the robustness of the Framework, from time-to-time the Company conducts cybersecurity tabletop testing exercises. As part of the Company’s supplier risk management program, using a risk-based approach, the Cybersecurity team conducts formal risk assessments with respect to certain of the Company’s third-party service providers. The assessment process addresses aspects of the service providers’ data security controls and policies.
The Framework is a set of coordinated procedures and tasks that the Company’s Incident Response team, under the direction of the CISO, executes with the goal of ensuring timely and effective resolution of cybersecurity incidents. To maintain the robustness of the Framework, from time-to-time the Company conducts cybersecurity tabletop testing exercises.
The Company has a Security Incident Response Framework (Framework) in place. The Framework comprises a set of coordinated procedures and tasks that the Company’s Incident Response team, under the direction of the CISO, executes with the goal of ensuring timely and effective resolution of cybersecurity incidents.
In addition to online training, employees are provided with cybersecurity information through a number of different methods, including awareness campaigns, gamified activities, recognition programs, security presentations, intranet articles, videos, system-generated communications, email publications and various simulation exercises. 57 The Company has a Security Incident Response Framework (Framework) in place.
The Company also provides regular targeted training on topics such as artificial intelligence related risks, phishing and secure application development, among others. In addition to online training, the Company provides employees with cybersecurity information through a number of different methods, including awareness campaigns, gamified activities, recognition programs, security presentations, intranet articles, videos, system-generated communications, email publications and various simulation exercises.
CYBERSECURITY Risk management and strategy The Company has implemented technologies and tools to evaluate its cybersecurity protections and maintain a cyber risk management strategy related to its technology infrastructure that includes monitoring emerging cybersecurity threats and assessing appropriate responsive measures. 56 Risk Identification The Company’s Chief Information Security Officer (“CISO”) and Cybersecurity team are actively engaged within the cybersecurity community in order to monitor emerging trends and developments and share best practices for identifying and mitigating cyber threats.
Item 1C. CYBERSECURITY Risk management and strategy The Company has implemented technologies and tools to evaluate its cybersecurity protections and maintain a cyber risk management strategy related to its technology infrastructure that includes monitoring emerging cybersecurity threats and assessing appropriate responsive measures.
Risk Assessment The Company performs an annual cybersecurity risk and control assessment as part of the Enterprise Risk Management team’s risk assessment processes. The CISO and the Chief Financial Officer of the Company’s Technology group review and approve the cybersecurity assessment.
The CISO and the Chief Financial Officer of the Company’s Technology and Operations group review and approve the cybersecurity assessment.
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The Company also provides regular targeted training on topics such as artificial intelligence (AI) related risks, phishing and secure application development, among others.
Added
Risk Identification The Company’s Chief Information Security Officer (“CISO”) and Cybersecurity team are actively engaged within the cybersecurity community in order to monitor emerging trends and developments and share best practices for identifying and mitigating cyber threats. For example, the Company participates in threat intelligence information-sharing networks, such as the Financial Services Information Sharing and Analysis Center (FS-ISAC).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES The Company leases its principal executive offices in New York, New York, as well as approximately 160 field and claim offices throughout the United States under leases or subleases with third parties. The Company also leases offices outside the United States, including in Canada, the United Kingdom and the Republic of Ireland.
Biggest changeItem 2. PROPERTIES The Company leases its principal executive offices in New York, New York, as well as approximately 155 field and claim offices throughout the United States under leases or subleases with third parties. The Company also leases offices outside the United States, including in the United Kingdom, the Republic of Ireland and Canada.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Beginning Period Ending Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) Oct. 1, 2024 Oct. 31, 2024 233,172 $ 253.16 226,727 $ 5,232 Nov. 1, 2024 Nov. 30, 2024 439,128 $ 257.36 437,099 $ 5,120 Dec. 1, 2024 Dec. 31, 2024 314,959 $ 254.38 314,646 $ 5,040 Total 987,259 $ 255.41 978,472 $ 5,040 The Company’s Board of Directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise.
Biggest changePeriod Beginning Period Ending Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) Oct. 1, 2025 Oct. 31, 2025 1,192,870 $ 271.57 1,190,283 $ 3,341 Nov. 1, 2025 Nov. 30, 2025 2,530,144 $ 288.16 2,524,279 $ 2,614 Dec. 1, 2025 Dec. 31, 2025 2,075,963 $ 288.99 2,074,002 $ 2,015 Total 5,798,977 $ 285.04 5,788,564 $ 2,015 The Company’s Board of Directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise.
The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels appropriate for the Company’s business operations, changes in levels of written premiums, funding of the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors.
The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining appropriate capital levels for business operations, changes in the levels of written premiums, funding of its qualified pension plan, regulatory capital requirements of the operating insurance subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors.
The cost of treasury stock acquired pursuant to common share repurchases includes the 1% excise tax imposed on common share repurchase activity, net of common share issuances, as part of the Inflation Reduction Act of 2022.
The cost of the treasury stock acquired pursuant to common share repurchases includes the 1% federal excise tax imposed on common share repurchase activity, net of common share issuances, as part of the Inflation Reduction Act of 2022.
Berkley Corporation, Arch Capital Group Limited, The Hartford Financial Services Group, Inc., Erie Indemnity Company and Assurant, Inc. Returns of each of the companies included in this index have been weighted according to their respective market capitalizations.
Berkley Corporation, Arch Capital Group Limited, The Hartford Financial Services Group, Inc., Erie Indemnity Company, Assurant, Inc. and American International Group, Inc. Returns of each of the companies included in this index have been weighted according to their respective market capitalizations.
For information regarding dividends paid to shareholders in 2024 and 2023 and the declaration and payment of future dividends, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities—Dividends.” 59 SHAREHOLDER RETURN PERFORMANCE GRAPH The following graph shows a five-year comparison of the cumulative total return to shareholders for the Company’s common stock and the common stock of companies included in the S&P 500 Index and the S&P 500 Property & Casualty Insurance Index, which the Company believes is the most appropriate comparative index.
For information regarding dividends paid to shareholders in 2025 and 2024 and the declaration and payment of future dividends, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities—Dividends.” 57 SHAREHOLDER RETURN PERFORMANCE GRAPH The following graph shows a five-year comparison of the cumulative total return to shareholders for the Company’s common stock and the common stock of companies included in the S&P 500 Index and the S&P 500 Property & Casualty Insurance Index, which the Company believes is the most appropriate comparative index.
These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards, and shares used by employees to cover the exercise price, as well as the related payroll withholding taxes, with respect to certain stock options that were exercised.
These shares consisted of shares retained to cover payroll withholding taxes in connection with the vesting of restricted stock unit awards and performance share awards, and shares used by employees to cover the exercise price, as well as the related payroll withholding taxes, for stock options that were exercised.
(2) Assumes $100 invested in common shares of The Travelers Companies, Inc. on December 31, 2019. (3) Companies in the S&P 500 Property & Casualty Insurance Index as of December 31, 2024 were the following: The Travelers Companies, Inc., Chubb Limited, Cincinnati Financial Corporation, The Progressive Corporation, The Allstate Corporation, Loews Corporation (CNA), W.R.
(2) Assumes $100 invested in common shares of The Travelers Companies, Inc. on December 31, 2020. (3) Companies in the S&P 500 Property & Casualty Insurance Index as of December 31, 2025 were the following: The Travelers Companies, Inc., Chubb Limited, Cincinnati Financial Corporation, The Progressive Corporation, The Allstate Corporation, Loews Corporation (CNA), W.R.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the New York Stock Exchange under the symbol “TRV.” The number of holders of record of the Company’s common stock was 29,387 as of February 7, 2025.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on the New York Stock Exchange under the symbol “TRV.” The number of holders of record of the Company’s common stock was 27,700 as of February 5, 2026.
The most recent authorization was approved by the Board of Directors on April 19, 2023 and added $5.0 billion of repurchase capacity to the $1.60 billion capacity remaining at that date. The authorizations do not have a stated expiration date.
The most recent authorization was approved by the Board of Directors on January 21, 2026 and added $5.0 billion of repurchase capacity to the $2.02 billion capacity remaining at that date, which was previously approved by the Board of Directors on April 19, 2023. The authorizations do not have a stated expiration date.
The Company acquired 8,787 shares for a total cost of $2 million during the three months ended December 31, 2024 that were not part of the publicly announced share repurchase authorizations.
The Company acquired 10,413 shares for a total cost of $3 million during the three months ended December 31, 2025 that were not part of the publicly announced share repurchase authorizations.
From January 1, 2007, the year prior to the financial crisis, through 60 December 31, 2024, the Company’s cumulative return to shareholders was 591% as compared to 490% for both the S&P 500 Index and the S&P 500 Property & Casualty Insurance Index.
From January 1, 2007, the year prior to the financial crisis, through 58 December 31, 2025, the Company’s cumulative return to shareholders was 745% as compared to 595% for the S&P 500 Index and 545% for the S&P 500 Property & Casualty Insurance Index.
As of December 31, 2019 2020 2021 2022 2023 2024 The Travelers Companies, Inc. $ 100.00 $ 105.36 $ 120.08 $ 146.99 $ 152.77 $ 196.72 S&P 500 Index 100.00 118.39 152.34 124.73 157.48 196.85 S&P 500 Property & Casualty Insurance Index 100.00 106.33 124.95 148.53 164.49 222.43 ________________________________________ (1) The cumulative total return to shareholders is a concept used to compare the performance of a company’s stock over time.
As of December 31, 2020 2021 2022 2023 2024 2025 The Travelers Companies, Inc. $ 100.00 $ 113.97 $ 139.52 $ 145.01 $ 186.72 $ 228.51 S&P 500 Index 100.00 128.68 105.36 133.03 166.28 195.98 S&P 500 Property & Casualty Insurance Index 100.00 117.51 139.69 154.70 209.20 228.84 ________________________________________ (1) The cumulative total return to shareholders is a concept used to compare the performance of a company’s stock over time.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

304 edited+31 added−38 removed270 unchanged
Biggest changeThe following table summarizes the components of the Company’s capital structure at December 31, 2024 and 2023: (at December 31, in millions) 2024 2023 Debt: Short-term $ 100 $ 100 Long-term 8,004 8,004 Net unamortized fair value adjustments and debt issuance costs (71) (73) Total debt 8,033 8,031 Shareholders’ equity: Common stock and retained earnings, less treasury stock 32,831 29,392 Accumulated other comprehensive loss (4,967) (4,471) Total shareholders’ equity 27,864 24,921 Total capitalization $ 35,897 $ 32,952 Total capitalization at December 31, 2024 was $35.90 billion, $2.95 billion higher than at December 31, 2023, primarily reflecting the impacts of (i) net income of $5.00 billion and (ii) proceeds from the exercise of employee share options of $321 million, partially offset by (iii) common share repurchases totaling $1.00 billion under the Company’s share repurchase authorizations, (iv) shareholder dividends of $962 million and (v) an other comprehensive loss of $496 million, primarily reflecting an increase in net unrealized losses on investments due to a change in interest rates during 2024. 95 The following table provides a reconciliation of total capitalization presented in the foregoing table to total capitalization excluding net unrealized losses on investments, net of taxes, included in shareholders’ equity: (at December 31, dollars in millions) 2024 2023 Total capitalization $ 35,897 $ 32,952 Less: net unrealized losses on investments, net of taxes, included in shareholders’ equity (3,640) (3,129) Total capitalization excluding net unrealized losses on investments, net of taxes, included in shareholders’ equity $ 39,537 $ 36,081 Debt-to-total capital ratio 22.4 % 24.4 % Debt-to-total capital ratio excluding net unrealized losses on investments, net of taxes, included in shareholders’ equity 20.3 % 22.3 % The debt-to-total capital ratio excluding net unrealized gains (losses) on investments, net of taxes, included in shareholders’ equity, is calculated by dividing (a) debt by (b) total capitalization excluding net unrealized gains and losses on investments, net of taxes, included in shareholders’ equity.
Biggest change(as of December 31, in millions) 2025 2024 Debt: Short-term $ 300 $ 100 Long-term 9,054 8,004 Net unamortized fair value adjustments and debt issuance costs (87) (71) Total debt 9,267 8,033 Shareholders’ equity: Common stock and retained earnings, less treasury stock 35,394 32,831 Accumulated other comprehensive loss (2,500) (4,967) Total shareholders’ equity 32,894 27,864 Total capitalization $ 42,161 $ 35,897 Total capitalization as of December 31, 2025 was $42.16 billion, $6.26 billion higher than at December 31, 2024, primarily reflecting the impacts of (i) net income of $6.29 billion, (ii) other comprehensive income of $2.47 billion, primarily reflecting a decrease in net unrealized losses on investments due to a change in interest rates during 2025, (iii) an increase in debt outstanding of $1.23 billion and (iv) proceeds from the exercise of employee share options of $214 million, partially offset by (v) common share repurchases totaling $3.03 billion under the Company’s share repurchase authorizations and (vi) shareholder dividends of $987 million.
Other revenues also include installment premium charges and other policyholder service charges.
Other revenues also include premium installment charges and other policyholder service charges.
In addition, refer to note 2 of the notes to the consolidated financial statements for a discussion of the Company’s net investment income allocation methodology.
In addition, refer to note 2 of the notes to the consolidated financial statements for a discussion of the Company’s net investment income allocation methodology.
As a result of the Company’s business outside of the United States, primarily in Canada, the United Kingdom (including Lloyd’s), the Republic of Ireland and in Brazil through a joint venture, the Company’s capital is also subject to the effects of changes in foreign currency exchange rates.
As a result of the Company’s business outside of the United States, primarily in the United Kingdom (including Lloyd’s), the Republic of Ireland, Canada and in Brazil through a joint venture, the Company’s capital is also subject to the effects of changes in foreign currency exchange rates.
In addition, given the temporary nature of net unrealized losses combined with the Company’s strong operating cash flows (which include income received on investments and the proceeds received upon maturity of the investments), the net unrealized investment loss is not expected to meaningfully impact the Company’s assessment of capital adequacy or liquidity.
In addition, given the temporary nature of net unrealized losses combined with the Company’s strong operating cash flows (which include income received on investments and the proceeds received upon maturity of the investments), the net unrealized investment loss is not expected to meaningfully impact the Company’s assessment of capital adequacy or liquidity.
Due to changes in the business mix for this product line over time, incurred claim liabilities for more recent years are generally shorter-tailed (due to both the products and the jurisdictions involved, e.g., Canada, the Republic of Ireland and the United Kingdom), compared to the older liabilities from runoff operations that are extremely long tail (e.g., U.S. excess liabilities reinsured through the London market, and several underwriting pools in runoff).
Due to changes in the business mix for this product line over time, incurred claim liabilities for more recent years are generally shorter-tailed (due to both the products and the jurisdictions involved, e.g., the Republic of Ireland, the United Kingdom and Canada), compared to the older liabilities from runoff operations that are extremely long tail (e.g., U.S. excess liabilities reinsured through the London market, and several underwriting pools in runoff).
International reserves are generally analyzed by country and general coverage category (e.g., General Liability in Canada, Commercial Property in the United Kingdom, etc.). The business is also generally split by direct versus assumed reinsurance for a given coverage.
International reserves are generally analyzed by country and general coverage category (e.g., Commercial Property in the United Kingdom, General Liability in Canada, etc.). The business is also generally split by direct versus assumed reinsurance for a given coverage.
See “Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth” included in “Part I—Item 1A—Risk Factors.” For further discussion of the Company’s investment portfolio, see “Investment Portfolio.” For a discussion of the risks to the Company’s business during or following a financial market disruption and risks to the Company’s investment portfolio, see the risk factors entitled “During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected” and “Our investment portfolio is subject to credit and interest rate risk, and may suffer reduced or low returns or material realized or unrealized losses” included in “Part I—Item 1A—Risk Factors.” For a discussion of the risks to the Company’s investments from foreign currency exchange rate fluctuations, see the risk factor entitled “We are subject to additional risks associated with our business outside the United States” included in “Part I—Item 1A—Risk Factors” and see “Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Rate Risk.” Capital Position.
See “Our businesses are heavily regulated by the states and countries in which we conduct business, including licensing, market conduct and financial supervision, and changes in regulation, including changes in tax regulation, may reduce our profitability and limit our growth” included in “Part I—Item 1A—Risk Factors.” For further discussion of the Company’s investment portfolio, see “Investment Portfolio.” For a discussion of the risks to the Company’s business during or following a financial market disruption and risks to the Company’s investment portfolio, see the risk factors entitled “During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected” and “Our investment portfolio is subject to credit and interest rate risk, and may suffer reduced or low returns or material realized or unrealized losses” included in “Part I—Item 1A—Risk Factors.” For a discussion of the risks to the Company’s investments from foreign currency exchange rate fluctuations, see the risk factor entitled “We are subject to additional risks associated with our business outside the United States” included in “Part I—Item 1A—Risk Factors” and see “Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Exchange Rate Risk.” 89 Capital Position.
While the ongoing review of asbestos and environmental claims and associated liabilities considers the inconsistencies of court decisions as to coverage, plaintiffs’ expanded theories of liability and the risks inherent in complex litigation and other uncertainties, in the opinion of the Company’s management, it is possible that the outcome of the continued uncertainties regarding these claims could result in liability in future periods that differs from current insurance reserves by an amount that could be material to the Company’s future operating results.
While the ongoing review of asbestos claims and associated liabilities considers the inconsistencies of court decisions as to coverage, plaintiffs’ expanded theories of liability and the risks inherent in complex litigation and other uncertainties, in the opinion of the Company’s management, it is possible that the outcome of the continued uncertainties regarding these claims could result in liability in future periods that differs from current insurance reserves by an amount that could be material to the Company’s future operating results.
In addition to the regulatory restrictions on the amount of dividends that can be paid by the Company’s U.S. insurance subsidiaries, the maximum amount of dividends that may be paid to the Company’s shareholders is also limited, to a lesser degree, by certain covenants contained in its line of credit agreement with a syndicate of financial institutions that require the 98 Company to maintain a minimum consolidated net worth as described in note 9 of the notes to the consolidated financial statements.
In addition to the regulatory restrictions on the amount of dividends that can be paid by the Company’s U.S. insurance subsidiaries, the maximum amount of dividends that may be paid to the Company’s shareholders is also limited, to a lesser degree, by certain covenants contained in its line of credit agreement with a syndicate of financial institutions that require the Company to maintain a minimum consolidated net worth as described in note 9 of the notes to the consolidated financial statements.
Thus, in almost all cases, it is impossible to discretely measure the effect of a single risk factor and construct a meaningful sensitivity expectation. 104 In order to provide information on reasonably possible reserving changes by product line, the historical changes in year-end claims and claim adjustment expense reserves over a one-year period are provided for the U.S. product lines.
Thus, in almost all cases, it is impossible to discretely measure the effect of a single risk factor and construct a meaningful sensitivity expectation. In order to provide information on reasonably possible reserving changes by product line, the historical changes in year-end claims and claim adjustment expense reserves over a one-year period are provided for the U.S. product lines.
Examples of common risk factors, or perceptions thereof, that could change and, thus, affect the required International and other reserves (beyond those included in the general discussion section, and in the Personal Automobile, Homeowners, General Liability, Commercial Property, Commercial Automobile and Surety discussions above) include: International and other risk factors • Changes in claim handling procedures, including those of the primary carriers • Changes in policy provisions or court interpretation of such provision • Economic trends • New theories of liability • Trends in jury awards • Changes in the propensity to sue • Changes in statutes of limitations • Changes in the underlying court system • Distortions from losses resulting from large single accounts or single issues • Changes in tort law • Changes in claim adjuster office structure (causing distortions in the data) • Changes in foreign currency exchange rates 114 International and other book of business risk factors • Changes in policy provisions (e.g., deductibles, policy limits, endorsements, “claims-made” language) • Changes in underwriting standards • Product mix (e.g., size of account, industries insured, jurisdiction mix) Unanticipated changes in risk factors can affect reserves.
Examples of common risk factors, or perceptions thereof, that could change and, thus, affect the required International and other reserves (beyond those included in the general discussion section, and in the Personal Automobile, Homeowners, General Liability, Commercial Property, Commercial Automobile and Surety discussions above) include: International and other risk factors • Changes in claim handling procedures, including those of the primary carriers • Changes in policy provisions or court interpretation of such provision • Economic trends 111 • New theories of liability • Trends in jury awards • Changes in the propensity to sue • Changes in statutes of limitations • Changes in the underlying court system • Distortions from losses resulting from large single accounts or single issues • Changes in tort law • Changes in claim adjuster office structure (causing distortions in the data) • Changes in foreign currency exchange rates International and other book of business risk factors • Changes in policy provisions (e.g., deductibles, policy limits, endorsements, “claims-made” language) • Changes in underwriting standards • Product mix (e.g., size of account, industries insured, jurisdiction mix) Unanticipated changes in risk factors can affect reserves.
The reserves associated with large claims are then analyzed utilizing various methods, such as: 103 • Estimating the number of large claims and their average values based on historical trends from prior accident periods, adjusted for the current environment and supplemented with actual data for the accident year analyzed to the extent available. • Utilizing individual claim adjuster estimates of the large claims, combined with continual monitoring of the aggregate accuracy of such claim adjuster estimates.
The reserves associated with large claims are then analyzed utilizing various methods, such as: • Estimating the number of large claims and their average values based on historical trends from prior accident periods, adjusted for the current environment and supplemented with actual data for the accident year analyzed to the extent available. • Utilizing individual claim adjuster estimates of the large claims, combined with continual monitoring of the aggregate accuracy of such claim adjuster estimates.
The Company’s Board of Directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorizations do not have a 94 stated expiration date.
The Company’s Board of Directors has approved common share repurchase authorizations under which repurchases may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorizations do not have a stated expiration date.
If the Company is unable to 88 implement risk-based pricing, modify policy terms or reduce exposures to the extent necessary to address rising losses related to catastrophes and smaller scale weather events (should those increased losses occur), its business may be adversely affected. See “Item 1—Business—Regulation—U.S.
If the Company is unable to implement risk-based pricing, modify policy terms or reduce exposures to the extent necessary to address rising losses related to catastrophes and smaller scale weather events (should those increased losses occur), its business may be adversely affected. See “Item 1—Business—Regulation—U.S.
As an indicator of the causal effect that a change in one or more risk factors could have on reserves for commercial multi-peril (excluding asbestos and environmental), a 1% increase (decrease) in incremental paid loss development for each future calendar year could result in a 1.4% increase (decrease) in claims and claim adjustment expense reserves.
As an indicator of the causal effect that a change in one or more risk factors could have on reserves for commercial multi-peril (excluding asbestos), a 1% increase (decrease) in incremental paid loss development for each future calendar year could result in a 1.4% increase (decrease) in claims and claim adjustment expense reserves.
Catastrophes can also be man-made, such as terrorist attacks and other destructive acts, including those involving nuclear, biological, chemical and radiological events, cyber events, explosions and destruction of infrastructure. The effects of catastrophes are included in net income (loss) and core income (loss) and claims and claim adjustment expense 65 reserves upon occurrence.
Catastrophes can also be man-made, such as terrorist attacks and other destructive acts, including those involving nuclear, biological, chemical and radiological events, cyber events, explosions and destruction of infrastructure. The effects of catastrophes are included in net income (loss) and core income (loss) and claims and claim adjustment expense reserves upon occurrence.
For further information regarding the Company’s reinsurance, see “Item 1—Business—Reinsurance.” The amounts for hurricanes reflect U.S. and Canadian exposures and include property exposures, property residual market exposures and an adjustment for certain non-property exposures. The hurricane loss amounts are based on the Company’s catastrophe risk model estimates and include losses from the hurricane hazards of wind and storm surge.
For further information regarding the Company’s reinsurance, see “Item 1—Business—Reinsurance.” The amounts for hurricanes reflect U.S. exposures and include property exposures, property residual market exposures and an adjustment for certain non-property exposures. The hurricane loss amounts are based on the Company’s catastrophe risk model estimates and include losses from the hurricane hazards of wind and storm surge.
As an indicator of the causal effect that a change in one or more risk factors could have on reserves for International and other (excluding asbestos and environmental), a 1% increase (decrease) in incremental paid loss development for each future calendar year could result in a 1.4% increase (decrease) in claims and claim adjustment expense reserves.
As an indicator of the causal effect that a change in one or more risk factors could have on reserves for International and other (excluding asbestos), a 1% increase (decrease) in incremental paid loss development for each future calendar year could result in a 1.4% increase (decrease) in claims and claim adjustment expense reserves.
The Company has entered into reinsurance agreements to manage its exposure to losses and protect its capital as described in note 6 of the notes to the consolidated financial statements. In order to qualify for reinsurance accounting, a reinsurance agreement must indemnify the insurer from insurance risk, i.e., the agreement must transfer amount and timing risk.
The Company has entered into reinsurance agreements to manage its exposure to losses and protect its capital as described in note 6 of the notes to the consolidated financial statements. 94 In order to qualify for reinsurance accounting, a reinsurance agreement must indemnify the insurer from insurance risk, i.e., the agreement must transfer amount and timing risk.
Writing new products with material reporting lags can result in adding several years’ worth of IBNR claim exposure before the reporting lag exposure becomes clearly observable, thereby increasing the risk associated with estimating the liabilities for claims and claim adjustment expenses for such products. The most extreme example of claim liabilities with long reporting lags are asbestos claims.
Writing new products with material reporting lags can result in adding several years’ worth of IBNR claim exposure before the reporting lag exposure becomes clearly observable, thereby increasing the risk associated with estimating the liabilities for claims and claim 99 adjustment expenses for such products. The most extreme example of claim liabilities with long reporting lags are asbestos claims.
Due to the subjective nature of the Company’s analysis and estimates of future cash flows, along with the judgment that must be applied in the analysis, it is possible that the Company could reach a different conclusion whether or not to impair a security 115 if it had access to additional information about the issuer.
Due to the subjective nature of the Company’s analysis and estimates of future cash flows, along with the judgment that must be applied in the analysis, it is possible that the Company could reach a different conclusion whether or not to impair a security if it had access to additional information about the issuer.
These policies are subject to substantial loss development over time as facts and circumstances change in the years following the policy issuance. The occurrence form, which accounts for much of the reserve development in asbestos and environmental exposures, is also used to provide coverage for construction general liability, including construction defect.
These policies are subject to substantial loss development over time as facts and circumstances change in the years following the policy issuance. The occurrence form, which accounts for much of the reserve development in asbestos exposures, is also used to provide coverage for construction general liability, including construction defect.
In addition, given the temporary nature of net unrealized losses combined with the Company’s strong operating cash flows, which include income received on investments and the proceeds received upon maturity of the 85 investments, the net unrealized investment loss is not expected to meaningfully impact the Company’s assessment of capital adequacy or liquidity.
In addition, given the temporary nature of net unrealized losses combined with the Company’s strong operating cash flows (which include income received on investments and the proceeds received upon maturity of the investments), the net unrealized investment loss is not expected to meaningfully impact the Company’s assessment of capital adequacy or liquidity.
In cases where the Company did not receive a release from the claimant, the amount due from the life insurance company related to the structured settlement is included in the Company’s consolidated balance sheet as a reinsurance recoverable and the related claim cost is included in the liability for claims and claim adjustment expense reserves, 89 as the Company retains the contingent liability to the claimant.
In cases where the Company did not receive a release from the claimant, the amount due from the life insurance company related to the structured settlement is included in the Company’s consolidated balance sheet as a reinsurance recoverable and the related claim cost is included in the liability for claims and claim adjustment expense reserves, as the Company retains the contingent liability to the claimant.
Historically, the one-year change in the reserve estimate for this product line over the last nine years has varied from -5% to 3% (averaging -1%) for the Company, and from -2% to 4% (averaging 1%) for the industry overall. The Company’s year-to-year changes are driven by, and are based on, observed events during the year.
Historically, the one-year change in the reserve estimate for this product line over the last nine years has varied from -5% to -3% (averaging -4%) for the Company, and from -5% to -2% (averaging -4%) for the industry overall. The Company’s year-to-year changes are driven by, and are based on, observed events during the year.
Included in other investments are private equity, hedge fund and real estate partnerships that are accounted for under the equity method of 91 accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period.
Included in other investments are private equity, hedge fund and real estate partnerships that are accounted for under the equity method of accounting and typically report their financial statement information to the Company one month to three months following the end of the reporting period.
However, the uncertainties surrounding the final resolution of these claims continue, and it is difficult to determine the ultimate exposure for asbestos and environmental claims and related litigation. As a result, these reserves are subject to revision as new information becomes available and as claims develop.
However, the uncertainties surrounding the final resolution of these claims continue, and it is difficult to determine the ultimate exposure for asbestos claims and related litigation. As a result, these reserves are subject to revision as new information becomes available and as claims develop.
The National Accounts market in Business Insurance is the primary source of the Company’s fee-based business and is discussed in the Business Insurance segment discussion that follows. 64 Net Realized Investment Gains (Losses) The following table sets forth information regarding the Company’s net pre-tax realized investment gains (losses).
The National Accounts market in Business Insurance is the primary source of the Company’s fee-based business and is discussed in the Business Insurance segment discussion that follows. Net Realized Investment Gains (Losses) The following table sets forth information regarding the Company’s net pre-tax realized investment gains (losses).
The Company evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies. Impairments Investment Impairments See note 1 of the notes to the consolidated financial statements for a discussion of investment impairments.
The Company 112 evaluates and monitors the financial condition of its reinsurers under voluntary reinsurance arrangements to minimize its exposure to significant losses from reinsurer insolvencies. Impairments Investment Impairments See note 1 of the notes to the consolidated financial statements for a discussion of investment impairments.
Changes in applicable legislation and future court and regulatory decisions and interpretations, including the outcome of legal challenges to legislative and/or judicial reforms establishing medical criteria for the pursuit of asbestos claims, could affect the settlement of asbestos and environmental claims.
Changes in applicable legislation and future court and regulatory decisions and interpretations, including the outcome of legal challenges to legislative and/or judicial reforms establishing medical criteria for the pursuit of asbestos claims, could affect the settlement of asbestos claims.
The Company believes that the combination of operating company liquidity, holding company liquidity, its investment portfolio and its capital resources are sufficient to meet its contractual obligations. Dividend Availability The Company’s principal insurance subsidiaries are domiciled in the State of Connecticut.
The Company believes that the combination of operating company liquidity, holding company liquidity, its investment portfolio and its capital resources are sufficient to meet its contractual obligations. 95 Dividend Availability The Company’s principal insurance subsidiaries are domiciled in the State of Connecticut.
Each estimation method has its own set of assumption variables and its own advantages and disadvantages, with no single estimation method being better than the others in all situations and no one set of assumption variables being meaningful for all product line components.
Each estimation method has its own set of assumption variables and its own advantages and disadvantages, with no single estimation method being better than the 98 others in all situations and no one set of assumption variables being meaningful for all product line components.
The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels appropriate for the Company’s business operations, changes in levels of written premiums, funding of the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors.
The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining appropriate capital levels for business operations, changes in the levels of written premiums, funding of its qualified pension plan, regulatory capital requirements of the operating insurance subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors.
Ratings shown are the higher of the rating of the underlying issuer or the insurer in the case of securities enhanced by third-party insurance for the payment of principal and interest in the event of issuer default.
Ratings shown are the higher of the rating of the underlying issues or the insurer in the case of securities enhanced by third-party insurance for the payment of principal and interest in the event of issuer default.
Many components of general liability are not subject to material latency or claim complexity risks and hence have materially 105 less uncertainty than the previously mentioned components.
Many components of general liability are not subject to material latency or claim complexity risks and hence have materially less uncertainty than the previously mentioned components.
This is due to the fact that the majority of the reserve for commercial property relates to the most recent accident year, which is subject to the most uncertainty for all product lines.
This is due to the fact that the majority of the reserve for commercial property 104 relates to the most recent accident year, which is subject to the most uncertainty for all product lines.
Strengthening of the U.S. dollar in comparison to other currencies could result in a reduction in shareholders’ equity, while a weakening of the U.S. dollar in comparison to other currencies could result in an 92 increase in shareholders’ equity.
Strengthening of the U.S. dollar in comparison to other currencies could result in a reduction in shareholders’ equity, while a weakening of the U.S. dollar in comparison to other currencies could result in an increase in shareholders’ equity.
Even if a change is determined to be permanent, it is not always possible to reliably determine the extent of the change until sometime later.
Even if a change is determined to be permanent, it is not always possible to 101 reliably determine the extent of the change until sometime later.
Year-to-year comparisons between 2023 and 2022 have been omitted from this Form 10-K, but may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.
Year-to-year comparisons between 2024 and 2023 have been omitted from this Form 10-K, but may be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
The Company also reviews its asbestos reserves quarterly. These reviews include, as appropriate, an analysis of exposure and claim payment patterns by policyholder, as well as recent settlements, policyholder bankruptcies, judicial rulings and legislative 76 actions. The Company also analyzes developing payment patterns among policyholders and the assumed reinsurance component of reserves, as well as projected reinsurance billings and recoveries.
The Company also reviews its asbestos reserves quarterly. These reviews include, as appropriate, an analysis of exposure and claim payment patterns by policyholder, as well as recent settlements, policyholder bankruptcies, judicial rulings and legislative 74 actions. The Company also analyzes developing payment patterns among policyholders and the assumed reinsurance component of reserves, as well as projected reinsurance billings and recoveries.
As an indicator of the causal effect that a change in one or more risk factors could have on reserves for commercial automobile, a 1% increase (decrease) in incremental paid loss development for each future calendar year could result in a 1.3% increase (decrease) in claims and claim adjustment expense reserves.
As an indicator of the causal effect that a change in one or more risk factors could have on reserves for commercial automobile, a 1% increase (decrease) in incremental paid loss development for each future calendar year could result in a 1.4% increase (decrease) in claims and claim adjustment expense reserves.
The reserve estimates for this product line are also potentially subject to material changes due to uncertainty in measuring ultimate losses for significant catastrophes such as hurricanes, tornadoes, hail storms and wildfires. The Company’s change in reserve estimate for this product line was -3% for 2024, 2% for 2023 and -8% for 2022.
The reserve estimates for this product line are also potentially subject to material changes due to uncertainty in measuring ultimate losses for significant catastrophes such as hurricanes, tornadoes, hail storms and wildfires. The Company’s change in reserve estimate for this product line was -8% for 2025, -3% for 2024 and 2% for 2023.
The timing and actual number of shares to be repurchased in the future will depend on a variety of additional factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining capital levels appropriate for the Company’s business operations, changes in levels of written premiums, funding of the Company’s qualified pension plan, capital requirements of the Company’s operating subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors.
The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company’s financial position, earnings, share price, catastrophe losses, maintaining appropriate capital levels for business operations, changes in the levels of written premiums, funding of its qualified pension plan, regulatory capital requirements of the operating insurance subsidiaries, legal requirements, regulatory constraints, other investment opportunities (including mergers and acquisitions and related financings), market conditions, changes in tax laws and other factors.
Conventional actuarial methods are not utilized to establish asbestos reserves, and the Company’s evaluations have not resulted in a reliable method to determine a meaningful average asbestos defense or indemnity payment. During the third quarter of 2024, the Company completed its annual in-depth asbestos claim review.
Conventional actuarial methods are not utilized to establish asbestos reserves, and the Company’s evaluations have not resulted in a reliable method to determine a meaningful average asbestos defense or indemnity payment. During the third quarter of 2025, the Company completed its annual in-depth asbestos claim review.
The impact of many of these items on ultimate costs for claims 100 and claim adjustment expenses is difficult to estimate.
The impact of many of these items on ultimate costs for claims and claim adjustment expenses is difficult to estimate.
The current target allocations for plan assets are 55% to 65% equity securities and 20% to 40% fixed income securities, with the remainder allocated to short-term securities. For 2025, the Company plans to apply an expected long-term rate of return on plan assets of 7.00%, comparable with 2024.
The current target allocations for plan assets are 55% to 65% equity securities and 20% to 40% fixed income securities, with the remainder allocated to short-term securities. For 2026, the Company plans to apply an expected long-term rate of return on plan assets of 7.00%, comparable with 2025.
Borrowers of these securities provide collateral equal to at least 102% of the market value of the loaned securities plus accrued interest. The Company did not incur any investment losses in its securities lending program for the years ended December 31, 2024 and 2023.
Borrowers of these securities provide collateral equal to at least 102% of the market value of the loaned securities plus accrued interest. The Company did not incur any investment losses in its securities lending program for the years ended December 31, 2025 and 2024.
Additionally, the amounts are as of December 31, 2024, reflect the reinsurance program in place at January 1, 2025, are net of reinsurance, after-tax, and exclude unallocated claim adjustment expenses, which historically have been less than 10% of loss estimates.
Additionally, the amounts are as of December 31, 2025, reflect the reinsurance program in place at January 1, 2026, are net of reinsurance, after-tax, and exclude unallocated claim adjustment expenses, which historically have been less than 10% of loss estimates.
Effective January 1, 2025, the Company renewed a quota share reinsurance agreement with subsidiaries of Fidelis Insurance Holdings Limited (Fidelis) for 2025 pursuant to which the Company assumes 20% of the subject gross written premiums of Fidelis on a risk-attaching basis, subject to a loss ratio cap.
Effective January 1, 2026, the Company renewed a quota share reinsurance agreement with subsidiaries of Fidelis Insurance Holdings Limited (Fidelis) for 2026 pursuant to which the Company assumes 20% of the subject gross written premiums of Fidelis on a risk-attaching basis, subject to a loss ratio cap.
The following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in 2024, 2023 and 2022, the amount of net unfavorable (favorable) prior year reserve development recognized in 2024 and 2023 for catastrophes that occurred in 2023 and 2022, and the estimate of ultimate losses for those catastrophes at December 31, 2024, 2023 and 2022.
The following table presents the amount of losses recorded by the Company for significant catastrophes that occurred in 2025, 2024 and 2023, the amount of net unfavorable (favorable) prior year reserve development recognized in 2025 and 2024 for catastrophes that occurred in 2024 and 2023, and the estimate of ultimate losses for those catastrophes at December 31, 2025, 2024 and 2023.
The Company may choose to accelerate the timing within 2025 and/or increase the amount of dividends from its insurance subsidiaries in 2025, which could result in certain dividends being subject to approval by the Connecticut Insurance Department prior to payment.
The Company may choose to accelerate the timing within 2026 and/or increase the amount of dividends from its insurance subsidiaries in 2026, which could result in certain dividends being subject to approval by the Connecticut Insurance Department prior to payment.
The Company’s year-to-year changes are driven by, and are based on, observed events during the year. The Company believes that its range of historical outcomes is illustrative of reasonably possible one-year changes in reserve estimates for this product line. General liability reserves (excluding asbestos and environmental) represent approximately 24% of the Company’s total claims and claim adjustment expense reserves.
The Company’s year-to-year changes are driven by, and are based on, observed events during the year. The Company believes that its range of historical outcomes is illustrative of reasonably possible one-year changes in reserve estimates for this product line. General liability reserves (excluding asbestos) represent approximately 26% of the Company’s total claims and claim adjustment expense reserves.
The Company does not have a minimum funding requirement for the qualified domestic pension plan for 2025 and does not anticipate having a minimum funding requirement in 2026. The Company has significant discretion in making contributions above those necessary to satisfy the minimum funding requirements.
The Company does not have a minimum funding requirement for the qualified domestic pension plan for 2026 and does not anticipate having a minimum funding requirement in 2027. The Company has significant discretion in making contributions above those necessary to satisfy the minimum funding requirements.
Changes in the legal, regulatory and legislative environment may impact the future resolution of asbestos and environmental claims and result in adverse loss reserve development. The emergence of a greater number of asbestos or environmental claims beyond that which is anticipated may result in adverse loss reserve development.
Changes in the legal, regulatory and legislative environment may impact the future resolution of asbestos claims and result in adverse loss reserve development. The emergence of a greater number of asbestos claims beyond that which is anticipated may result in adverse loss reserve development.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of the Company’s financial condition and results of operations for the years ended December 31, 2024 and 2023, including year-to-year comparisons between 2024 and 2023.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and analysis of the Company’s financial condition and results of operations for the years ended December 31, 2025 and 2024, including year-to-year comparisons between 2025 and 2024.
Refer to the “Net Investment Income” section of the “Consolidated Results of Operations” discussion for a description of the factors contributing to the increase in the Company’s consolidated net investment income in 2024 as compared with 2023.
Refer to the “Net Investment Income” section of the “Consolidated Results of Operations” discussion for a description of the factors contributing to the increase in the Company’s consolidated net investment income in 2025 as compared with 2024.
It is possible that changes in economic conditions, the supply chain, international trade, the labor market and geopolitical tensions, as well as steps taken by federal, state and/or local governments and the Federal Reserve could lead to higher or lower inflation than the Company anticipated, which could in turn lead to an increase or decrease in the Company’s loss costs and the need to strengthen or reduce claims and claim adjustment expense reserves.
It is possible that changes in economic conditions, the supply chain, international trade, including the impact of tariffs, the labor market and geopolitical tensions, as well as steps taken by federal, state and/or local governments and the Federal Reserve could lead to higher or lower inflation than the Company anticipated, which could in turn lead to an increase or decrease in the Company’s loss costs and the need to strengthen or reduce claims and claim adjustment expense reserves.
The Company’s change in reserve estimate for this product line related to the last nine accident years, which excludes the impacts of increases in asbestos and environmental reserves, the extension of the statute of limitations for childhood sexual molestation claims and increases in reserves in the Company’s runoff operations, was 4% for 2024, 4% for 2023 and 2% for 2022.
The Company’s change in reserve estimate for this product line related to the last nine accident years, which excludes the impacts of increases in asbestos reserves, the extension of the statute of limitations for childhood sexual molestation claims and increases in reserves in the Company’s runoff operations, was 2% for 2025, 4% for 2024 and 4% for 2023.
Historically, the one-year change in the reserve estimate for this product line over the last nine years has varied from -11% to 2% (averaging -7%) for the Company, and from -10% to -2% (averaging -6%) for the industry overall. The Company’s year-to-year changes are driven by, and are based on, observed events during the year.
Historically, the one-year change in the reserve estimate for this product line over the last nine years has varied from -11% to 2% (averaging -7%) for the Company, and from -12% to -2% (averaging -7%) for the industry overall. The Company’s year-to-year changes are driven by, and are based on, observed events during the year.
This is supplemented with detailed custom analyses where needed. 108 Examples of common risk factors, or perceptions thereof, that could change and, thus, affect the required commercial automobile reserves (beyond those included in the general discussion section) include: Bodily injury and property damage liability risk factors • Trends in jury awards • Changes in the underlying court system • Changes in case law • Litigation trends • Increases in attorney involvement in, or impact on, claims • Frequency of claims with payment capped by policy limits • Change in average severity of accidents, or proportion of severe accidents, including the impact of inflation • Changes in auto safety technology • Subrogation opportunities • Changes in claim handling philosophies • Frequency of visits to health providers • Number of medical procedures given during visits to health providers • Types of health providers used • Types of medical treatments received • Changes in cost of medical treatments • Degree of patient responsiveness to treatment Commercial automobile book of business risk factors • Changes in policy provisions (e.g., deductibles, policy limits, endorsements, etc.) • Changes in mix of insured vehicles (e.g., long haul trucks versus local and smaller vehicles, fleet risks versus non-fleets) • Changes in underwriting standards Unanticipated changes in risk factors can affect reserves.
Examples of common risk factors, or perceptions thereof, that could change and, thus, affect the required commercial automobile reserves (beyond those included in the general discussion section) include: Bodily injury and property damage liability risk factors • Trends in jury awards • Changes in the underlying court system • Changes in case law • Litigation trends • Increases in attorney involvement in, or impact on, claims • Frequency of claims with payment capped by policy limits • Change in average severity of accidents, or proportion of severe accidents, including the impact of inflation • Changes in auto safety technology • Subrogation opportunities • Changes in claim handling philosophies • Frequency of visits to health providers • Number of medical procedures given during visits to health providers • Types of health providers used • Types of medical treatments received • Changes in cost of medical treatments • Degree of patient responsiveness to treatment Commercial automobile book of business risk factors • Changes in policy provisions (e.g., deductibles, policy limits, endorsements, etc.) • Changes in mix of insured vehicles (e.g., long haul trucks versus local and smaller vehicles, fleet risks versus non-fleets) • Changes in underwriting standards Unanticipated changes in risk factors can affect reserves.
Workers’ compensation reserves are typically analyzed in three components: indemnity losses, medical losses and claim adjustment expenses. 109 Examples of common risk factors, or perceptions thereof, that could change and, thus, affect the required workers’ compensation reserves (beyond those included in the general discussion section) include: Indemnity risk factors • Time required to recover from the injury • Degree of available transitional jobs • Degree of legal involvement • Changes in the interpretations and processes of the administrative bodies that oversee workers’ compensation claims • Future wage inflation for states that index benefits • Changes in the administrative policies of second injury funds Medical risk factors • Changes in the cost of medical treatments (including prescription drugs) and underlying fee schedules (“inflation”) • Availability of medical providers and medical wage impacts • Frequency of visits to health providers • Number of medical procedures given during visits to health providers • Types of health providers used • Type of medical treatments received • Use of preferred provider networks and other medical cost containment practices • Availability of new medical processes and equipment • Changes in the use of pharmaceutical drugs, including drugs for pain management • Degree of patient responsiveness to treatment General workers’ compensation risk factors • Frequency of reopening claims previously closed • Mortality trends of injured workers with lifetime benefits and medical treatment • Changes in statutory benefits, including due to presumption laws • The impact, if any, of potential future changes to government health insurance legislation Workers’ compensation book of business risk factors • Product mix • Injury type mix • Changes in underwriting standards Unanticipated changes in risk factors can affect reserves.
Examples of common risk factors, or perceptions thereof, that could change and, thus, affect the required workers’ compensation reserves (beyond those included in the general discussion section) include: Indemnity risk factors • Time required to recover from the injury • Degree of available transitional jobs • Degree of legal involvement • Changes in the interpretations and processes of the administrative bodies that oversee workers’ compensation claims • Future wage inflation for states that index benefits • Changes in the administrative policies of second injury funds Medical risk factors • Changes in the cost of medical treatments (including prescription drugs) and underlying fee schedules (“inflation”) • Availability of medical providers and medical wage impacts • Frequency of visits to health providers • Number of medical procedures given during visits to health providers • Types of health providers used • Type of medical treatments received • Use of preferred provider networks and other medical cost containment practices • Availability of new medical processes and equipment • Changes in the use of pharmaceutical drugs, including drugs for pain management • Degree of patient responsiveness to treatment General workers’ compensation risk factors • Frequency of reopening claims previously closed • Mortality trends of injured workers with lifetime benefits and medical treatment • Changes in statutory benefits, including due to presumption laws • The impact, if any, of potential future changes to government health insurance legislation Workers’ compensation book of business risk factors • Product mix • Injury type mix • Changes in underwriting standards Unanticipated changes in risk factors can affect reserves.
These statements include, among other things, the Company’s statements about: • the Company’s outlook, the impact of trends on its business and its future results of operations and financial condition (including, among other things, anticipated premium volume, premium rates, renewal premium changes, underwriting margins and underlying underwriting margins, net and core income, investment income and performance, loss costs, return on equity, core return on equity and expected current returns, and combined ratios and underlying combined ratios); • the impact of legislative or regulatory actions or court decisions; • share repurchase plans; • future pension plan contributions; • the sufficiency of the Company’s reserves, including asbestos; • the impact of emerging claims issues as well as other insurance and non-insurance litigation; • the cost and availability of reinsurance coverage; • catastrophe losses (including the January 2025 California wildfires) and modeling, including statements about probabilities or likelihood of exceedance; • the impact of investment (including changes in interest rates), economic (including inflation, changes in tax laws, changes in commodity prices and fluctuations in foreign currency exchange rates) and underwriting market conditions; • the Company’s approach to managing its investment portfolio; • the impact of changing climate conditions; • strategic and operational initiatives to improve growth, profitability and competitiveness; 116 • the Company’s competitive advantages and innovation agenda, including executing on that agenda with respect to artificial intelligence; • the Company’s cybersecurity policies and practices; • new product offerings; • the impact of developments in the tort environment, such as increased attorney involvement in insurance claims; • the impact of developments in the geopolitical environment; and • the impact of the Company’s acquisition of Corvus Insurance Holdings, Inc.
These statements include, among other things, the Company’s statements about: • the Company’s outlook, the impact of trends on its business and its future results of operations and financial condition (including, among other things, anticipated premium volume, premium rates, renewal premium changes, underwriting margins and underlying underwriting margins, net and core income, investment income and performance, loss costs, return on equity, core return on equity and expected current returns, and combined ratios and underlying combined ratios); • the impact of legislative or regulatory actions or court decisions; • share repurchase plans; • future pension plan contributions; • the sufficiency of the Company’s reserves, including asbestos; 113 • the impact of emerging claims issues as well as other insurance and non-insurance litigation; • the cost and availability of reinsurance coverage; • catastrophe losses and modeling, including statements about probabilities or likelihood of exceedance; • the impact of investment (including changes in interest rates), economic (including inflation, the impact of tariffs, changes in tax laws, changes in commodity prices and fluctuations in foreign currency exchange rates) and underwriting market conditions; • the Company’s approach to managing its investment portfolio; • the impact of changing climate conditions; • strategic and operational initiatives to improve growth, profitability and competitiveness; • the Company’s competitive advantages and innovation agenda, including executing on that agenda with respect to artificial intelligence; • the Company’s cybersecurity policies and practices; • new product offerings; • the impact of developments in the tort environment, such as increased attorney involvement in insurance claims; and • the impact of developments in the geopolitical environment.
The increase in income before income taxes primarily reflected the pre-tax impacts of (i) higher underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”), (ii) higher net investment income, (iii) higher net favorable prior year reserve development and (iv) lower net realized investment losses, partially offset by (v) higher catastrophe losses.
The increase in income before income taxes primarily reflected the pre-tax impacts of (i) higher underwriting margins excluding catastrophe losses and prior year reserve development (“underlying underwriting margins”), (ii) higher net investment income and (iii) higher net favorable prior year reserve development, partially offset by (iv) higher catastrophe losses.
See the preceding discussion of “Asbestos Claims and Litigation” and “Environmental Claims and Litigation.” General Discussion The process for estimating the liabilities for claims and claim adjustment expenses begins with the collection and analysis of claim data.
See the preceding discussion of “Asbestos Claims and Litigation.” General Discussion The process for estimating the liabilities for claims and claim adjustment expenses begins with the collection and analysis of claim data.
Property and casualty insurance market conditions are expected to remain competitive during 2025 for new business. In each of the Company’s business segments, new business generally has less of an impact on underwriting profitability than renewal business, given the volume of new business relative to renewal business.
Property and casualty insurance market conditions are expected to remain competitive during 2026 for new business. In each of the Company’s business segments, new business generally has less of an impact on underwriting profitability than renewal 87 business, given the volume of new business relative to renewal business.
The Company’s change in reserve estimate for this product line related to the last nine accident years, which excludes the impacts of increases in asbestos and environmental reserves and increases in reserves in the Company’s runoff operations, was 1% for 2024, 0% for 2023 and -2% for 2022.
The Company’s change in reserve estimate for this product line related to the last nine accident years, which excludes the impacts of increases in asbestos reserves and increases in reserves in the Company’s runoff operations, was -2% for 2025, 1% for 2024 and 0% for 2023.
The Company believes that its range of historical outcomes is illustrative of reasonably possible one-year changes in reserve estimates for this product line. Commercial automobile reserves represent approximately 9% of the Company’s total claims and claim adjustment expense reserves. The Company’s change in reserve estimate for this product line was 0% for 2024, 4% for 2023 and 0% for 2022.
The Company believes that its range of historical outcomes is illustrative of reasonably possible one-year changes in reserve estimates for this product line. Commercial automobile reserves represent approximately 10% of the Company’s total claims and claim adjustment expense reserves. The Company’s change in reserve estimate for this product line was 0% for 2025, 0% for 2024 and 4% for 2023.
While the latest available government data continue to reflect a declining trend in deaths caused by mesothelioma, the number of policyholders with open asbestos claims was relatively flat compared to 2023. Net asbestos paid loss and loss adjustment expenses in 2024, 2023 and 2022 were $282 million, $212 million and $245 million, respectively.
While the latest available government data continue to reflect a declining trend in deaths caused by mesothelioma, the number of policyholders with open asbestos claims was relatively flat compared to 2024. Net asbestos paid loss and loss adjustment expenses in 2025, 2024 and 2023 were $261 million, $282 million and $212 million, respectively.
Net written premiums may also be impacted by the structure of reinsurance programs and related costs, as well as changes in foreign currency exchange rates. Overall, the Company expects that retention levels (the amount of expiring premium that renews, before the impact of renewal premium changes) will remain strong by historical standards during 2025.
Net written premiums may also be impacted by the structure of reinsurance programs and related costs, as well as changes in foreign currency exchange rates. Overall, the Company expects that retention levels (the amount of expiring premium that renews, before the impact of renewal premium changes) will remain strong during 2026.
The Company utilized uncollateralized letters of credit issued by major banks with an aggregate limit of $260 million to provide a portion of the capital needed to support its obligations at Lloyd’s at December 31, 2024.
The Company utilized uncollateralized letters of credit issued by major banks with an aggregate limit of $260 million to provide a portion of the capital needed to support its obligations at Lloyd’s as of December 31, 2025.
The increase in segment income before income taxes was driven by the pre-tax impacts of (i) higher underlying underwriting margins, (ii) higher net favorable prior year reserve development and (iii) higher net investment income, partially offset by (iv) higher catastrophe losses. Net favorable prior year reserve development in 2024 and 2023 was $490 million and $147 million, respectively.
The increase in segment income before income taxes was driven by the pre-tax impacts of (i) higher underlying underwriting margins, (ii) higher net investment income and (iii) higher net favorable prior year reserve development, partially offset by (iv) higher catastrophe losses. Net favorable prior year reserve development in 2025 and 2024 was $582 million and $490 million, respectively.
TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs. The undistributed earnings of the Company’s foreign operations are intended to be permanently reinvested in those operations, and such earnings were not material to the Company’s financial position or liquidity at December 31, 2024.
TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs. The undistributed earnings of the Company’s foreign operations are intended to be permanently reinvested in those operations, and such earnings were not material to the Company’s financial position or liquidity as of December 31, 2025.
TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs. The undistributed earnings of the Company’s foreign operations are intended to be permanently reinvested in those operations, and such earnings were not material to the Company’s financial position or liquidity at December 31, 2024.
TRV is not dependent on dividends or other forms of repatriation from its foreign operations to support its liquidity needs. The undistributed earnings of the Company’s foreign operations are intended to be permanently reinvested in those operations, and such earnings were not material to the Company’s financial position or liquidity as of December 31, 2025.
TRV has a shelf registration statement filed with the Securities and Exchange Commission that expires on June 8, 2025 which permits it to issue securities from time to time. TRV also has a $1.0 billion line of credit facility with a syndicate of financial institutions that expires on June 15, 2027.
TRV has a shelf registration statement filed with the Securities and Exchange Commission that expires on June 4, 2028 which permits it to issue securities from time to time. TRV also has a $1.0 billion line of credit facility with a syndicate of financial institutions that expires on June 15, 2027.
The continuing uncertainties include, without limitation: • the risks and lack of predictability inherent in complex litigation; 78 • a further increase in the cost to resolve, and/or the number of, asbestos and environmental claims beyond that which is anticipated; • the emergence of a greater number of asbestos claims than anticipated as a result of extended life expectancies resulting from medical advances and lifestyle improvements; • the continued application of more stringent cleanup standards on existing and emerging contaminants; • the role of any umbrella or excess policies we have issued; • the resolution or adjudication of disputes concerning coverage for asbestos and environmental claims in a manner inconsistent with our previous assessment of these disputes; • the number and outcome of direct actions against us; • future developments pertaining to our ability to recover reinsurance for asbestos and environmental claims; • any impact on asbestos or environmental defendants we insure due to the bankruptcy of other asbestos or environmental defendants; • the unavailability of other insurance sources potentially available to policyholders, whether through exhaustion of policy limits or through the insolvency of other participating insurers; and • uncertainties arising from the insolvency or bankruptcy of policyholders.
The continuing uncertainties include, without limitation: • the risks and lack of predictability inherent in complex litigation; • a further increase in the cost to resolve, and/or the number of, asbestos claims beyond that which is anticipated; • the emergence of a greater number of asbestos claims than anticipated as a result of extended life expectancies resulting from medical advances and lifestyle improvements; • the role of any umbrella or excess policies we have issued; • the resolution or adjudication of disputes concerning coverage for asbestos claims in a manner inconsistent with our previous assessment of these disputes; • the number and outcome of direct actions against us; • future developments pertaining to our ability to recover reinsurance for asbestos claims; • any impact on asbestos defendants we insure due to the bankruptcy of other asbestos defendants; • the unavailability of other insurance sources potentially available to policyholders, whether through exhaustion of policy limits or through the insolvency of other participating insurers; and • uncertainties arising from the insolvency or bankruptcy of policyholders.
Impairment Charges Impairment charges included in net realized investment losses in the consolidated statement of income were $10 million, $12 million and $38 million for the years ended December 31, 2024, 2023 and 2022, respectively. See note 3 of the notes to the consolidated financial statements for further information.
Impairment Charges Impairment charges included in net realized investment losses in the consolidated statement of income were $2 million, $10 million and $12 million for the years ended December 31, 2025, 2024 and 2023, respectively. See note 3 of the notes to the consolidated financial statements for further information.
The 2022 change primarily reflected better than expected loss experience in the fidelity and surety product line for accident years 2015 through 2019 and 2021. 111 Personal Automobile Personal automobile includes both short and long tail coverages. The payments that are made quickly typically pertain to auto physical damage (property) claims and property damage (liability) claims.
The 2023 change primarily reflected better than expected loss experience in the fidelity and surety product line for accident years 2021 and 2022. Personal Automobile Personal automobile includes both short and long tail coverages. The payments that are made quickly typically pertain to auto physical damage (property) claims and property damage (liability) claims.
While an environment of higher interest rates during 2023 and 2024 resulted in significant net unrealized investment losses, the net unrealized loss is considered temporary in nature as it is not due to credit impairments, there is no impact on expected contractual cash flows from fixed maturities, and the Company generally holds its high-quality fixed maturity investments to maturity.
While an environment of higher interest rates, such as that which occurred during 2023 and 2024, and moderated in 2025, resulted in significant net unrealized investment losses, the net unrealized loss is considered temporary in nature as it is not due to credit impairments, there is no impact on expected contractual cash flows from fixed maturities, and the Company generally holds its high-quality fixed maturity investments to maturity.
The 2024 change primarily reflected better than expected loss experience related to both catastrophe and non-catastrophe losses for accident years 2018 through 2020 and 2023. The 2023 change primarily reflected higher than expected loss experience related to both catastrophe and non-catastrophe losses for accident year 2022.
The 2025 change primarily reflected better than expected loss experience related to both catastrophe and non-catastrophe losses for accident years 2022 through 2024. The 2024 change primarily reflected better than expected loss experience related to both catastrophe and non-catastrophe losses for accident years 2018 through 2020 and 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company does not currently anticipate significant changes in its primary market risk exposures or in how those exposures are managed in future reporting periods based upon what is known or expected to be in effect in future reporting periods. 117 SENSITIVITY ANALYSIS Sensitivity analysis is defined as the measurement of potential loss in future earnings, fair values or cash flows of market sensitive instruments resulting from one or more selected hypothetical changes in interest rates and other market rates or prices over a selected period of time.
Biggest changeSENSITIVITY ANALYSIS Sensitivity analysis is defined as the measurement of potential loss in future earnings, fair values or cash flows of market sensitive instruments resulting from one or more selected hypothetical changes in interest rates and other market rates or prices over a selected period of time.
Durations on tax-exempt securities are adjusted for the fact that the yields on such securities do not normally move in lockstep with changes in the U.S. Treasury curve. Fixed maturity portfolio durations are calculated on a market value-weighted basis, including accrued interest, using holdings as of December 31, 2024 and 2023.
Durations on tax-exempt securities are adjusted for the fact that the yields on such securities do not normally move in lockstep with changes in the U.S. Treasury curve. Fixed maturity portfolio durations are calculated on a market value-weighted basis, including accrued interest, using holdings as of December 31, 2025 and 2024.
For debt, the change in fair value is determined by calculating hypothetical December 31, 2024 and 2023 ending prices based on yields adjusted to reflect a 100 basis point change, comparing such hypothetical ending prices to actual ending prices, and multiplying the difference by the par or securities outstanding.
For debt, the change in fair value is determined by calculating hypothetical December 31, 2025 and 2024 ending prices based on yields adjusted to reflect a 100 basis point change, comparing such hypothetical ending prices to actual ending prices, and multiplying the difference by the par or securities outstanding.
Invested assets denominated in other currencies at December 31, 2024 and 2023 were not material. There were no other significant changes in the Company’s primary market risk exposures or in how those exposures were managed for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Invested assets denominated in other currencies as of December 31, 2025 and 2024 were not material. There were no other significant changes in the Company’s primary market risk exposures or in how those exposures were managed for the year ended December 31, 2025 compared to the year ended December 31, 2024.
At December 31, 2024 and 2023, approximately 6.8% and 7.2%, respectively, of the Company’s invested assets were denominated in foreign currencies. The Company’s exposure to equity price risk is not significant. The Company has no direct commodity risk and is not a party to any credit default swaps.
As of December 31, 2025 and 2024, approximately 3.7% and 6.8%, respectively, of the Company’s invested assets were denominated in foreign currencies. The Company’s exposure to equity price risk is not significant. The Company has no direct commodity risk and is not a party to any credit default swaps.
The sensitivity analysis model used by the Company produces a loss in fair value of market sensitive instruments of approximately $3.06 billion and $2.58 billion based on a 100 basis point increase in interest rates at December 31, 2024 and 2023, respectively.
The sensitivity analysis model used by the Company produces a loss in fair value of market sensitive instruments of approximately $3.68 billion and $3.06 billion based on a 100 basis point increase in interest rates as of December 31, 2025 and 2024, respectively.
Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying assets are traded. The following is a discussion of the Company’s primary market risk exposures and how those exposures are managed as of December 31, 2024.
Market risk is directly influenced by the volatility and liquidity in the markets in which the related underlying assets are traded. The following is a discussion of the Company’s primary market risk exposures and how those exposures are managed as of December 31, 2025 and excludes amounts held for sale.
The Company’s analysis indicates that a hypothetical 10% reduction in the value of foreign denominated investments would be expected to produce a loss in fair value of approximately $643 million and $638 million at December 31, 2024 and 2023, respectively. 118
The Company’s analysis indicates that a hypothetical 10% reduction in the value of foreign denominated investments would be expected to produce a loss in fair value of approximately $373 million and $643 million as of December 31, 2025 and 2024, respectively. 115
The Company’s market risk sensitive instruments, including derivatives, are primarily entered into for purposes other than trading. The carrying value of the Company’s investment portfolio at December 31, 2024 and 2023 was $94.22 billion and $88.81 billion, respectively, of which 89% and 87%, respectively, was invested in fixed maturity securities.
The Company’s market risk sensitive instruments, including derivatives, are primarily entered into for purposes other than trading. The carrying value of the Company’s investment portfolio as of December 31, 2025 and 2024 was $101.18 billion and $94.22 billion, respectively, of which 89% was invested in fixed maturity securities as of both dates.
Invested assets denominated in the Canadian dollar comprised approximately 3.8% and 4.1% of the total invested assets at December 31, 2024 and 2023, respectively. Invested assets denominated in the British Pound Sterling comprised approximately 2.4% of total invested assets at both December 31, 2024 and 2023.
Invested assets denominated in the Canadian dollar comprised approximately 0.5% and 3.8% 114 of the total invested assets as of December 31, 2025 and 2024, respectively. Invested assets denominated in the British Pound Sterling comprised approximately 2.5% and 2.4% of total invested assets as of December 31, 2025 and 2024, respectively.
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The Company does not currently anticipate significant changes in its primary market risk exposures or in how those exposures are managed in future reporting periods based upon what is known or expected to be in effect in future reporting periods.

Other TRV 10-K year-over-year comparisons