Dive Brief:
- The Travelers Companies significantly increased investments in strategic IT capabilities while reining in spend on routine technology since 2017, the company’s Chairman and CEO Alan Schnitzer said Wednesday, speaking during a Q4 2024 earnings call.
- “Over an eight-year period, we simultaneously and meaningfully increased our technology spend and improved the strategic mix of that spend,” Schnitzer said, pointing to investments in cyber, analytics and AI.
- Travelers poured more than $1.5 billion into IT last year, directing nearly half the amount to strategic initiatives. The insurer’s strategic investments in cloud, analytics, data modernization and AI, which more than doubled in eight years, helped improve the company’s productivity and efficiency, said Schnitzer.
Dive Insight:
The path to scaling generative AI capabilities and realizing returns on investment in the technology leads through data systems into the cloud. Travelers’ prolonged focus on modernization is now driving gains across the business, according to Schnitzer.
“Broadly speaking, we’re digitizing the value chain,” he said. “That’s digitizing the customer journey. It’s modernizing the foundation. It’s advanced analytics. It’s automation. It’s faster speed to market.”
Last year, the insurer opened an Atlanta innovation hub to support data science, engineering and AI teams in Travelers’ growing technology organization.
The company leaned on a cross-functional team of procurement, finance and IT pros to identify business cases for generative AI, Mojgan Lefebvre, EVP and chief technology and operations officer at Travelers, said, speaking at the MIT Sloan CIO Symposium last May.
“At the enterprise level, we’re also investing in talent and AI and third-party data product development,” Schnitzer told investors Wednesday.
The data-rich insurance industry is ripe for generative AI innovation.
American International Group achieved underwriting processing time reductions and accuracy improvements in early pilots of the technology last year. Liberty Mutual also saw efficiency improvements from an initiative that integrated a ChatGPT in workflows, Tony Marron, managing director of Liberty IT, told CIO Dive in December.
Travelers’ technology investments are part of a broader strategy to bolster risk expertise, improve customer experience and expand productivity gains, Schnitzer said.
“The successful execution of that strategy has been an important contributor to our strong results, providing us with the financial resources to enable us to continue investing at scale.”
The company’s net income increased 67% year over year to nearly $5 billion in 2024. Annual revenues grew 12% to more than $46 billion.
