Mid-January saw insurance company, Travelers, announce a new deal that empowers 10,000 engineers and data scientists with AI assistants. However, less than two weeks on, Travelers\u2019 leadership explained that the company\u2019s true competitive advantage lies in expertise, not AIs alone, believing this is what will drive longer-term profit growth.
\nAccording to Travelers\u2019 chief executive officer Alan Schnitzer, over 20,000 professionals at the company currently \u201cuse AI tools regularly.\u201d He also commented on company claims that Travelers\u2019 call centres are experiencing a boost in efficiency at the hands of AI, leading to claims call centre cuts.
\nAI technology and innovation driving growth
\nTravelers\u2019 net profit has increased, according to Schnitzer, largely fuelled by the company\u2019s intensive technology and innovation strategy. Travelers reportedly increased its total value of insurance policies it sold by nearly 7% a year on average between 2016 and 2025. Its underlying combined ratio improved by almost eight points, falling to 83.9.
\nSchnitzer explained that heavy investment in technology has coincided with improved profits. \u201cNotwithstanding a increase in our technology spending, that improvement in underlying profitability includes a 3-point or 10% improvement in our expense ratio. Over the decade, we developed the competitive advantage of an innovation skill set. Now we\u2019re bringing all that Part 1 know-how to Innovation 2.0 at Travelers, powered by AI \u2013 and not too far off quantum computing.\u201d
\nInnovation 1.0 relates to the company\u2019s strategy and foundation to this success, and it has plans to move into a more advanced stage it\u2019s calling Innovation 2.0, in which AI is the central driver.
\nAutomation equals call centre culls
\nSchnitzer noted how automation has directly reduced staffing needs and improved claims efficiency, something clearly seen in recent numbers. For instance, Schnitzer said that Travelers\u2019 \u201cclaim call centre population is down by a third,\u201d and steps are being taken to consolidate four claims call centres into two.
\nSuch efficiency gains have reduced loss adjustment expenses, improving the company\u2019s loss ratio. Ultimately, investment in automation and analytics have helped Travelers \u201crefine indemnity payouts and drive operational efficiencies.\u201d
\nSchnitzer stated that over 50% of all claims made to Travelers are now eligible for straight-through processing, and customers are adopting this processing approximately in two-thirds of cases. He went on to say that: \u201cAnother 15% of all claims are processed with advanced digital tools. All of those percentages are growing.\u201d
\nDespite automated tools doing the bulk of claims work, the CEO said that some customers still prefer to call the company to report and discuss claims. Therefore, Travelers has set up an advanced natural language generative AI voice agent that handles initial phone calls.
\nSchnitzer heralded the success of this voice agent, saying: \u201cEarly customer adoption is exceeding our expectation.\u201d
\nAI and automation reshaping operations in Travelers
\nThe benefits of AI and automation are far-reaching, beyond just claims call centres, according to Schnitzer. \u201cOther use cases enhance underwriting decision quality and efficiency and improve the experience for customers, agents, brokers and employees.\u201d
\nGreg Toczydlowski, executive vice president and president of business insurance for Travelers, spoke about how gen AI agents have been used to \u201cefficiently mine\u201d data sources, both internally and externally. These help the company \u201cbetter understand and synthesise the risk characteristics.\u201d Toczydlowski added that the recent agent additions have boosted the speed of underwriting processes and improved segmented pricing.
\nHe explained how the company\u2019s commercial underwriters are performing very well, enhanced by advanced tools used to evaluate risks. Tools include models that refine pricing and summarise past claims data, streamlining the entire process.
\n\u201cThey\u2019re not only executing with excellence in the market today, but they\u2019re also helping to shape the transformation of our industry,\u201d Toczydlowski said.
\nMichael Klein, executive vice president and president of personal insurance for Travelers, underscored AI\u2019s importance in personal insurance, saying it is used to make renewal underwriting \u201cmore effective and efficient.\u201d
\nKlein said, \u201cwe start with a proprietary AI-enabled predictive model that scores every account in the property portfolio. Based on this score, accounts with the highest probable risk of loss are presented to underwriters for review. From there, our renewal underwriting platform uses generative AI to consolidate data into summaries of relevant actionable information for our underwriters to evaluate.\u201d
\nAs a result, Klein said that there has been a 30% reduction in average handle times. Therefore, \u201cthe net result is that our underwriters focus their efforts on decisions most likely to improve profitability and do so more efficiently.\u201d
\nIn Speciality insurance, Jeffrey Klenk, president of bond & speciality insurance at Travelers, commented on how AI has cut times to intake submissions from \u201chours to just minutes.\u201d He also said AI has recently been implemented to streamline renewals.
\nInnovation 2.0 \u2013 AI\u2019s impact on jobs
\nDespite claims call centre headcounts already reduced, Schnitzer did not speculate on further cuts. Instead, he emphasised the increasing productivity AI has brought to Travelers. \u201cWhat I would say is that per employee is up, thanks to some productivity and efficiency initiatives, and we expect per employee to continue to go up.\u201d
\nTravelers\u2019 Innovation 1.0 strategy has been the key driver to the company\u2019s strong 10-year profits, according to Schnitzer. Over the decade, we developed the competitive advantage of an innovation skill set. Now we\u2019re bringing all that Part 1 know-how to Innovation 2.0 at Travelers, powered by AI \u2013 and not too far off quantum computing.\u201d
\nHe believes that AI is set to benefit the entire P\/C landscape, highlighting how recent advanced AI tools are able to \u201cunderstand and execute the complex stakeholder interactions, well-defined processes, data-intensive workflows and massive amounts of unstructured data.\u201d
\nSchnitzer said human expertise with AI \u201camplifies existing strength,\u201d and said Travelers is investing heavily in \u201cAI and other sophisticated technology solutions.\u201d He said \u201cDozens of scaled generative AI tools are already in production. Millions of transactions are now automated\u2026 And agentic AI isn\u2019t a future aspiration. It\u2019s embedded in our business operations today.\u201d
\nAI and automated technologies are poised to transform the insurance industry tenfold, as Travelers expects such technologies to \u201cresult in faster and more cost-effective delivery of new abilities.\u201d
\nFrom product development to new business prospecting to underwriting speed and quality, agent and customer service and more, AI is benefiting Travelers, its customers, and distribution partners, showcasing the technology\u2019s vast impact in the business and industry.
\n(Image source: \u201cGOES Satellites Capture Holiday Weather Travel Conditions\u201d by NASA Goddard Photo and Video is licensed under CC BY 2.0.)
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\nThe post AI use surges at Travelers as call centre roles reduce appeared first on AI News.<\/p>\n","protected":false},"excerpt":{"rendered":"
Mid-January saw insurance company, Travelers, announce a new deal that empowers 10,000 engineers and data scientists with AI assistants. However, less than two weeks on, Travelers\u2019 leadership explained that the company\u2019s true competitive advantage lies in expertise, not AIs alone, believing this is what will drive longer-term profit growth. According to Travelers\u2019 chief executive officer [\u2026]<\/p>\n
The post AI use surges at Travelers as call centre roles reduce<\/a> appeared first on AI News<\/a>.<\/p>\n<\/div>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-container-style":"default","site-container-layout":"default","site-sidebar-layout":"default","disable-article-header":"default","disable-site-header":"default","disable-site-footer":"default","disable-content-area-spacing":"default","footnotes":""},"categories":[4,1,71,563,55,57],"tags":[3],"class_list":["post-937","post","type-post","status-publish","format-standard","hentry","category-ai","category-ai-and-ml","category-ai-business-strategy","category-contact-centres","category-service-industry-ai","category-world-of-work","tag-ai"],"yoast_head":"\n