Travelers Companies (The)

“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.””

Annual report 2025A · The company itself

“In addition, new technology, such as artificial intelligence, could create unforeseen exposures or coverage issues under the policies we write and aggravate claims fraud and cybercrime.”

Annual report 2025A · The company itself

“The Company’s competitive position in the marketplace is based on many factors, including the following: •ability to profitably price business, retain existing customers and obtain new business; •premiums charged, contract terms and conditions, products and services offered (including the ability to design customized programs); •agent, broker and policyholder relationships; •ability to keep pace relative to competitors with changes in technology and information systems, including artificial intelligence; •ability to use data and analytics to make decisions; •speed of claims payment; •ability to provide a positive customer experience; •ability to provide products and services in a cost effective manner; •ability to provide new products and services to meet changing customer needs; •ability to adapt to changes in business models, technology, customer preferences or regulation impacting the markets in which the Company operates; •perceived overall financial strength and corresponding ratings assigned by independent rating agencies; •ability to recruit and retain qualified employees; •geographic scope of business; and •local presence.”

Annual report 2025A · The company itself

“In recent years, the Company has invested significant additional resources in many of its claims handling operations, including digital, analytics, artificial intelligence and automation capabilities.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“In these and other situations, agents and brokers have an increased influence over policy language and compensation structure which, if we participate on that basis, could adversely impact our ability to profitably manage underwriting risk.”

Annual report 2025A · The company itself

“(together with its consolidated subsidiaries, the Company) is a holding company principally engaged, through its subsidiaries, in providing a wide range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals.”

Annual report 2025A · The company itself

“We market our insurance products primarily through independent agents and brokers.”

Annual report 2025A · The company itself

“For example, technologies such as driverless vehicles, assisted-driving or accident prevention technologies, technologies that facilitate ride, car or home sharing, smart homes or automation could reduce the number of vehicles in use and/or the demand for, or profitability of, certain of our products, create coverage issues or impact the frequency or severity of losses, and we may not be able to respond effectively.”

Annual report 2025A · The company itself

“In recent years, the Company has invested significant additional resources in many of its claims handling operations, including digital, analytics, artificial intelligence and automation capabilities.”

Annual report 2025A · The company itself

“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.””

Annual report 2025A · The company itself

“The Company’s competitive position in the marketplace is based on many factors, including the following: •ability to profitably price business, retain existing customers and obtain new business; •premiums charged, contract terms and conditions, products and services offered (including the ability to design customized programs); •agent, broker and policyholder relationships; •ability to keep pace relative to competitors with changes in technology and information systems, including artificial intelligence; •ability to use data and analytics to make decisions; •speed of claims payment; •ability to provide a positive customer experience; •ability to provide products and services in a cost effective manner; •ability to provide new products and services to meet changing customer needs; •ability to adapt to changes in business models, technology, customer preferences or regulation impacting the markets in which the Company operates; •perceived overall financial strength and corresponding ratings assigned by independent rating agencies; •ability to recruit and retain qualified employees; •geographic scope of business; and •local presence.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“We have outsourced certain technology and business process functions to third parties and may increasingly do so in the future. If we do not effectively develop, implement and monitor our vendor relationships, if third party providers do not perform as anticipated or experience financial difficulties, if we experience technological or other problems with a transition to a new vendor, or if vendor relationships relevant to our business process functions are terminated, we may not realize expected productivity improvements or cost efficiencies and may experience operational difficulties, increased costs and a loss of business.”

Annual report 2025A · The company itself

“National Accounts also offers insurance-related services, such as claims administration, risk management, loss control and risk management information services through Constitution State Services LLC, a wholly-owned subsidiary of the Company. •National Property and Other provides traditional and customized commercial property insurance programs to large and mid-sized customers through National Property, as well as insurance coverages and programs provided by Northland Transportation, Agribusiness, Northfield and National Programs.”

Annual report 2025A · The company itself

“BOND & SPECIALTY INSURANCE Bond & Specialty Insurance offers surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers, primarily in the United States, and certain surety and specialty insurance products in Canada, the United Kingdom, the Republic of Ireland and Brazil (through a joint venture, as described below), in each case utilizing various degrees of financially-based underwriting approaches.”

Annual report 2025A · The company itself

“Northland Transportation provides insurance coverage for the commercial trucking industry. Agribusiness serves small- to medium-sized agricultural businesses, including farms, ranches and other agricultural-related operations.”

Annual report 2025A · The company itself

“Northland Transportation provides insurance coverage for the commercial trucking industry. Agribusiness serves small- to medium-sized agricultural businesses, including farms, ranches and other agricultural-related operations.”

Annual report 2025A · The company itself

“BOND & SPECIALTY INSURANCE Bond & Specialty Insurance offers surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to its customers, primarily in the United States, and certain surety and specialty insurance products in Canada, the United Kingdom, the Republic of Ireland and Brazil (through a joint venture, as described below), in each case utilizing various degrees of financially-based underwriting approaches.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“•National Accounts provides large companies with casualty insurance products and services, including workers’ compensation, commercial automobile and general liability, generally utilizing loss-sensitive products, on both a bundled and unbundled basis, as well as risk management, claims administration and other insurance-related services.”

Annual report 2025A · The company itself

“PERSONAL INSURANCE Personal Insurance offers a broad range of property and casualty insurance products and services covering individuals’ personal risks, primarily in the United States. Personal Insurance’s primary products of automobile and homeowners insurance are complemented by a broad suite of related products and coverages.”

Annual report 2025A · The company itself

“An important part of our business is written through less than a dozen such intermediaries, including the agency affiliate of GEICO, with whom we have had a distribution arrangement for homeowners’ business since 1995.”

Annual report 2025A · The company itself

“Since 1995, the Company has had a distribution agreement with the agency affiliate of GEICO to underwrite a portion of their homeowners business.”

Annual report 2025A · The company itself

“Catastrophe Exposure The Company’s property and casualty insurance operations expose it to claims arising out of catastrophes. The Company uses various analyses and methods, including proprietary and third-party modeling processes, to monitor and analyze underwriting risks of business in natural catastrophe-prone areas and target risk areas for conventional terrorist attacks (defined as attacks other than nuclear, biological, chemical or radiological events). The Company relies, in part, upon these analyses to make underwriting decisions designed to manage its exposure on catastrophe-exposed business.”

Annual report 2025A · The company itself

“In addition to the normal risks associated with any multiple-peril coverage, the profitability and pricing of both homeowners and automobile insurance are affected by the incidence of catastrophes and other weather-related events, as well as other unusual circumstances, such as the impact of supply chain disruptions, labor shortages and elevated inflation.”

Annual report 2025A · The company itself

“The reinsurance agreement provides coverage of up to $575 million to the Company through May 24, 2026 for certain losses from tropical cyclones, earthquakes, severe thunderstorms or winter storms in the locations listed above.”

Annual report 2025A · The company itself

“States from time to time have passed legislation, and regulators have taken action, that have the effect of limiting the ability of insurers to manage catastrophe risk, such as legislation restricting insurers from reducing exposures or withdrawing from catastrophe-prone areas or mandating that insurers participate in residual markets involving catastrophe-prone areas.”

Annual report 2025A · The company itself

“Furthermore, the reduction or elimination of the National Flood Insurance Program could result in an increase in the Company’s exposure to flood risk if insurers become required to cover flood risk under certain types of policies.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“A downgrade in one or more of the Company’s claims-paying ratings could negatively impact the Company’s business volumes and competitive position because demand for certain of its products may be reduced, particularly because some customers require that the Company maintain minimum ratings to enter into, maintain or renew business with it.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Many states have laws and regulations which may impact the timing and/or the ability of an insurer to either discontinue or substantially reduce its writings in that state. These laws and regulations typically require prior notice and in some instances insurance department approval prior to discontinuing a line of business or withdrawing from that state.”

Annual report 2025A · The company itself

“As a condition of their authority to transact insurance in virtually all states, property and casualty insurers, including the Company’s domestic insurance subsidiaries, are required to be a member of each state’s guaranty association and to bear a portion of the losses covered by the guaranty association (subject to a statutory maximum covered loss amount which varies by state) suffered by claimants of insurers that become insolvent. Additionally, many states also have laws that establish second-injury funds that impose assessments on insurers writing workers’ compensation business, including the Company, to provide compensation to injured employees for the aggravation of a prior injury or disability.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“For example, rapid changes in the sophistication and use of certain types of cyber-attacks, such as ransomware and social engineering attacks, as well as other cyber incidents impacting our insureds, have increased the frequency and severity of losses under our policies.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Cyber-attacks and employee or vendor misconduct (inadvertent or intentional) could expose our systems or data to unauthorized parties or otherwise cause significant disruptions.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Pricing for personal automobile insurance is driven in large part by changes in the frequency of claims and changes in severity, including inflation in the cost of automobile replacements and repairs (including parts and labor), medical care and resolution of liability claims.”

Annual report 2025A · The company itself

“Pricing in the homeowners business is driven in large part by changes in the frequency of claims and changes in severity, including inflation in the cost of materials, labor and household possessions.”

Annual report 2025A · The company itself

“Our profitability substantially depends on the extent to which our actual claims experience is consistent with the assumptions we use in pricing our policies.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“Additionally, a downgrade in one or more of the Company’s debt ratings could adversely impact the Company’s ability to access the capital markets and other sources of funds, including in the syndicated bank loan market, and/or result in higher financing costs. For example, downgrades in the Company’s debt ratings could result in higher interest expense under the Company’s revolving credit agreement (under which the cost of borrowing could range from the Secured Overnight Financing Rate (SOFR) plus 85 basis points (including a credit spread adjustment) to SOFR plus 147.5 basis points (including a credit spread adjustment), depending on the Company’s debt ratings), the Company’s commercial paper program, or in the event that the Company were to access the capital markets by issuing debt or similar types of securities.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“The primary market risks to the investment portfolio are interest rate risk and credit risk associated with investments in fixed maturity securities.”

Annual report 2025A · The company itself

“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.””

Annual report 2025A · The company itself

“There is significant competition from within the property and casualty insurance industry and from businesses outside the industry for qualified employees, especially those in key positions and those possessing highly specialized knowledge in areas such as underwriting, data and analytics, technology, claims and artificial intelligence. This competition has continued in recent periods and, with the ability for employees to work remotely, is taking place on a broad geographic scale.”

Annual report 2025A · The company itself

“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. 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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“REINSURANCE The Company reinsures a portion of the risks it underwrites in order to manage its exposure to losses and to protect its capital. The Company cedes to reinsurers a portion of these risks and pays premiums based upon the risk and exposure of the policies subject to such reinsurance. The Company utilizes a variety of reinsurance agreements to manage its exposure to large property and casualty losses, including facultative as well as catastrophe and individual risk treaties.”

Annual report 2025A · The company itself

“However, laws or regulations, or judicial or administrative findings, could significantly curtail the use of particular types of underwriting criteria.”

Annual report 2025A · The company itself

“For example, changes to state law regarding workers’ compensation insurance or to requirements for other insurance products could impact the demand for our products, and the legalization of cannabis in certain states has, according to some studies, resulted in more automobile accidents.”

Annual report 2025A · The company itself

“The Company’s foreign exchange market risk exposure is concentrated in the Company’s invested assets, insurance reserves and shareholders’ equity denominated in foreign currencies.”

Annual report 2025A · The company itself

“In addition, the competitive environment could be impacted by changes in customer preferences, including customer demand for direct distribution channels and/or greater choice, not only in personal lines, but also in commercial lines (where direct writers may become a more significant source of competition in the future, particularly in the small commercial market).”

Annual report 2025A · The company itself

“For example, technologies such as driverless vehicles, assisted-driving or accident prevention technologies, technologies that facilitate ride, car or home sharing, smart homes or automation could reduce the number of vehicles in use and/or the demand for, or profitability of, certain of our products, create coverage issues or impact the frequency or severity of losses, and we may not be able to respond effectively.”

Annual report 2025A · The company itself

“These risks include restrictions such as price controls, capital controls, currency exchange limits, ownership limits and other restrictive or anti-competitive governmental actions or requirements, which could have an adverse effect on our business and our reputation.”

Annual report 2025A · The company itself

“Future pandemics could materially affect our results of operations, financial position and/or liquidity.”

Annual report 2025A · The company itself

“In addition, state tax laws that specifically impact the insurance industry, such as premium taxes, or more general tax laws, such as U.S. federal corporate taxes, could be enacted or changed and could have a material adverse impact on us.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“International also provides insurance for both the foreign exposures of United States organizations and the United States exposures of foreign organizations through Global Services.”

Annual report 2025A · The company itself

“Geographic Distribution The following table shows the geographic distribution of the Company’s consolidated direct written premiums for the year ended December 31, 2025. Location % of Total Domestic: California 10.6 % Texas (1) 8.3 New York 8.3 Pennsylvania 4.2 Florida 4.1 Illinois 3.8 New Jersey 3.7 Georgia 3.7 Massachusetts 3.3 All other domestic (2) 45.2 Total Domestic 95.2 International: Canada 2.5 All other international 2.3 Total International 4.8 Consolidated total 100.0 % ___________________________________________ (1)The percentage for Texas includes business written by the Company through a fronting agreement with another insurer.”

Annual report 2025A · The company itself

“(for the year ended December 31, in millions) 2025 2024 2023 % of Total 2025 Domestic: Automobile Total Personal Insurance $ 17,446 $ 17,169 $ 15,929 100.0 % Principal Markets and Methods of Distribution Personal Insurance products are marketed and distributed primarily through thousands of independent agents and brokers located throughout the United States, supported by personnel in seven sales regions. In addition, sales and service support are supplemented through contact centers. Principal markets for Personal Insurance products are spread throughout the contiguous United States.”

Annual report 2025A · The company itself

“Location % of Total Domestic: Texas (1) 9.5 % New York 8.9 California 7.4 Pennsylvania 5.1 Georgia 4.9 New Jersey 4.2 Massachusetts 4.0 Florida 3.9 Maryland 3.9 Virginia 3.6 Colorado 3.5 Connecticut 3.3 Illinois 3.0 All other domestic (2) 31.1 Total Domestic 96.3 International: Canada 3.7 Total International 3.7 Total Personal Insurance 100.0 % ___________________________________________ (1)The percentage for Texas includes business written by the Company through a fronting agreement with another insurer.”

Annual report 2025A · The company itself

“Human Capital Management As of December 31, 2025, the Company had approximately 34,000 employees, approximately 90% of whom are located in the United States.”

Annual report 2025A · The company itself

“The following table shows the geographic distribution of the Company’s employees as of December 31, 2025.”

Annual report 2025A · The company itself

“We conduct business outside the United States primarily in the United Kingdom, the Republic of Ireland and Canada.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“We conduct business outside the United States primarily in the United Kingdom, the Republic of Ireland and Canada.”

Annual report 2025A · The company itself

“The following table shows the geographic distribution of the Company’s employees as of December 31, 2025.”

Annual report 2025A · The company itself

“We conduct business outside the United States primarily in the United Kingdom, the Republic of Ireland and Canada.”

Annual report 2025A · The company itself

“Significant areas of oversight and influence by the EU include capital and solvency requirements (Solvency II), competition law, intermediary and distribution regulation, gender discrimination, sustainability disclosures, including climate change disclosure, and data security and privacy.”

Annual report 2025A · The company itself

“The following table shows the geographic distribution of the Company’s employees as of December 31, 2025.”

Annual report 2025A · The company itself

“Significant areas of oversight and influence by the EU include capital and solvency requirements (Solvency II), competition law, intermediary and distribution regulation, gender discrimination, sustainability disclosures, including climate change disclosure, and data security and privacy.”

Annual report 2025A · The company itself

“Significant areas of oversight and influence by the EU include capital and solvency requirements (Solvency II), competition law, intermediary and distribution regulation, gender discrimination, sustainability disclosures, including climate change disclosure, and data security and privacy.”

Annual report 2025A · The company itself

“(Junto). The Company owns 49.5% of Junto, a market leader in surety coverages in Brazil.”

Annual report 2025A · The company itself