US primary insurer The Travelers Companies, Inc. produced a stronger combined ratio for both the fourth quarter and full year 2025, as net income strengthened for both periods, while the firm reports record full year operating cash flows of $10.6 billion.
Travelers has kicked off Q4 and FY’25 results season with a strong set of financials, with net income rising by 20% to $2.5 billion for Q4, and increasing by 26% to $6.3 billion for FY’25, compared with the comparable prior year periods.
Total revenues hit $12.4 billion for Q4’25 and $48.8 billion for the full year, up 4% and 5%, respectively, on 2024’s figures. Core income also rose by 18% to $2.5 billion for the quarter, and by 26% to $6.3 billion for the full year.
In terms of the top line, net written premiums (NWP) increased by 1% in the fourth quarter to $10.9 billion, and increased by 2% for the full year to $44.4 billion, with growth achieved across all business segments.
In Business Insurance, NWP climbed by 2% to $5.5 billion for Q4’25, and by 3% to $22.7 billion for FY’25. Bond & Specialty Insurance NWP increased by 4% to $1.1 billion for Q4’25, and by 4% to $4.3 billion for FY’25. In Personal Insurance, Q4’25 NWP was flat year-on-year at $4.2 billion, but increased by 2% to $17.5 billion for FY’25.
Travelers has reported an underwriting gain of $2.2 billion for Q4’25 and $4.3 billion for FY’25, an increase of $383 million and $1.3 billion, respectively, on the previous year.
The Q4’25 underwriting result benefitted from $321 million of net favourable prior year reserve development, compared with $262 million of favourable development in Q4’24. Catastrophe losses, net of reinsurance, decreased to $95 million in Q4’25 from $175 million in Q4’24.
The full year 2025 underwriting result includes more than $1 billion of net favourable prior year reserve development, 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 produced a combined ratio of 80.2% for Q4’25, an improvement on the prior year’s 83.2%, as the underlying combined ratio strengthened to 82.2% from 84% for the quarter.
For full year 2025, the combined ratio improved by 2.6 percentage points to 89.9% compared with 92.5% in 2024, as the underlying combined ratio strengthened to 83.9% from 86.2%.
The asset side of the balance sheet also performed well in the quarter and the full year. For the fourth quarter of 2025, net investment income totalled $1.1 billion, an increase of $99 million on the prior year. Full year 2025 net investment income rose by $369 million year-on-year to just shy of $4 billion.
Alan Schnitzer, Chairman and Chief Executive Officer, commented: “We are pleased to report excellent fourth quarter and full year results driven by strong performance across both underwriting and investments. Our results this year and over time reflect the power of our earnings engine fueled by the disciplined execution of our strategy across every dimension of our business.
“Core income for the quarter was $2.5 billion, or $11.13 per diluted share, generating core return on equity of 29.6%. Core income benefited from a 3% increase in net earned premiums to $11.1 billion and a combined ratio that improved 3 points to a terrific 80.2%. The business performed exceptionally well across the board, as strong underlying profitability, net favorable prior year reserve development and a lower level of catastrophe losses drove the improvement. All three segments delivered excellent underwriting results on both an underlying and an as-reported basis. Our high-quality investment portfolio generated after-tax net investment income of $867 million. These results, along with our strong balance sheet, enabled us to return $1.9 billion of excess capital to our shareholders this quarter, including $1.7 billion of share repurchases.
“For the full year, core income was up 26% to $6.3 billion, or $27.59 per diluted share, generating core return on equity of 19.4%. During the year, we grew adjusted book value per share by 14%, after returning $4.2 billion of excess capital to shareholders and investing more than $1.5 billion in cutting-edge AI and other technology initiatives.
“Through disciplined marketplace execution across all three segments, we grew net written premiums in the quarter to $10.9 billion. In Business Insurance, we grew net written premiums 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 Bond & Specialty Insurance, we grew net written premiums to $1.1 billion, with excellent retention of 87% and positive renewal premium change in our high-quality management liability business. In our industry-leading surety business, we grew net written premiums from a very strong level in the prior year quarter. In Personal Insurance, net written premiums of $4.2 billion reflected continued strong renewal premium change in Homeowners and higher new business in Auto.
“Our proven strategy positions us to continue generating substantial shareholder value. The durability of our underlying business performance provides a powerful foundation. Delivering a compelling value proposition to customers and distribution partners, combined with underwriting excellence across our diversified portfolio and gains in productivity, drives consistently strong profitability and substantial cash flow. Our investment expertise, growing portfolio and higher reinvestment rates are delivering meaningful growth in net investment income. Operating from this position of strength, we remain highly confident in the outlook for Travelers in 2026 and beyond.”
