Major U.S. insurance company The Travelers Companies, Inc.’s combined ratio improved in both the fourth quarter and full-year 2025, with net income strengthening in both periods, while the company reported full-year operating cash flow of $10.6 billion.
Travelers kicked off the Q4 and FY25 earnings season with strong financial data. Compared with the same period last year, net profit in Q4 increased by 20% to US$2.5 billion, and net profit in FY25 increased by 26% to US$6.3 billion.
Total revenue for the fourth quarter and full year 2025 will reach $12.4 billion and $48.8 billion, respectively, up 4% and 5% respectively from 2024 figures. Core revenue also increased 18% in the quarter to $2.5 billion, and full-year core revenue increased 26% to $6.3 billion.
In terms of revenue, net written premiums (NWP) increased 1% in the fourth quarter to $10.9 billion and 2% for the full year to $44.4 billion, with growth across all business segments.
In commercial insurance, NWP grew 2% to $5.5 billion in Q4’25 and 3% to $22.7 billion in FY25. Bond and specialty insurance NWP increased 4% in Q4’25 to $1.1 billion and increased 4% in FY25 to $4.3 billion. In personal lines, NWP in 4Q25 was flat year-over-year at $4.2 billion, but grew 2% in FY25 to $17.5 billion.
Travelers reported underwriting earnings of $2.2 billion in the fourth quarter of 2025 and $4.3 billion in FY25, an increase of $383 million and $1.3 billion, respectively, from the previous year.
Underwriting results in 4Q25 benefited from favorable net provision development of $321 million in the prior year compared to a favorable development of $262 million in 4Q24. Catastrophe losses (net of reinsurance) fell to $95 million in 4Q25 from $175 million in 4Q24.
Full-year 2025 underwriting results included prior-year net favorable reserve development of more than $1.0 billion, up from $709 million in 2024, although this was slightly offset by higher catastrophe losses (net of reinsurance) of $3.7 billion in 2025, compared with $3.3 billion in 2024.
As a result, the insurer’s combined ratio in 4Q25 was 80.2%, an improvement from 83.2% in the previous year, with the underlying combined ratio rising to 82.2% from 84% in the quarter.
For the full year of 2025, the combined ratio increased by 2.6 percentage points to 89.9% from 92.5% in 2024, and the underlying combined ratio increased from 86.2% to 83.9%.
The asset side of the balance sheet also performed well during the quarter and full year. In the fourth quarter of 2025, net investment income totaled $1.1 billion, an increase of $99 million from the prior year. Net investment income for the full year of 2025 will increase by US$369 million year-on-year to nearly US$4 billion.
Alan Schnitzer, Chairman and Chief Executive Officer, commented: “We are pleased to report excellent results for the fourth quarter and full year, driven by strong performance in underwriting and investing. Our results this year and in the periods ahead reflect the strength of our profitability engine, which is driven by the disciplined execution of our strategy at every level of the business.”
“Core revenue for the quarter was $2.5 billion, or $11.13 per diluted share, with a core return on equity of 29.6%. Core revenue benefited from a 3% increase in net premiums earned to $11.1 billion and a 3% improvement in the combined ratio percentage points, reaching an impressive 80.2%. The overall performance of the business was exceptional due to strong underlying profitability, prior year net reserve development and lower levels of catastrophe losses. Our high-quality portfolio generated $867 million in after-tax net investment income, which combined with our strong balance sheet, enabled us to return $1.9 billion of excess capital to shareholders during the quarter, including $1.7 billion in share repurchases.
“Full-year core revenue increased 26% to $6.3 billion, or $27.59 per diluted share, with a core return on equity of 19.4%. During the year, we returned $4.2 billion of excess capital to shareholders and invested more than $1.5 billion in cutting-edge artificial intelligence and other technology projects, and our adjusted book value per share increased 14%.
“Through disciplined market execution across all three segments, our net written premiums grew to $10.9 billion in the quarter. In commercial lines, our net written premiums grew to $5.5 billion. Retention remained strong at 85%, renewal premium change was 6.1%, and new business was very strong at $675 million. In bonds and specialty lines, our net written premiums grew to $11 billion, with an excellent retention rate of 87% and positive change in our high-quality renewal premiums. In our industry-leading guaranteed business, our net written premiums increased from a strong level in the year-ago quarter, with net written premiums reaching $4.2 billion, reflecting continued strong change in homeowner renewal premiums and an increase in automotive new business.
“Our proven strategy positions us to continue to create substantial shareholder value. The durability of our underlying business performance provides a strong foundation. Delivering a compelling value proposition to customers and distribution partners, coupled with underwriting excellence and productivity improvements across our diverse portfolio, drives continued strong profitability and substantial cash flow. Our investment expertise, growing portfolio and higher reinvestment rates are delivering significant growth in net investment income. With this strength, we remain confident in Travelers’ prospects for 2026 and beyond.”
