Travelers Companies (TRV) risk factors, FY2025 10-K

Insurance-Related Risks

1. 01High levels of catastrophe losses, including as a result of factors such as increased concentrations of insured exposures in catastrophe-prone areas and changing climate conditions, could materially and adversely affect our results of operations, our financial position and/or liquidity, and could adversely impact our ratings, our ability to raise capital and the availability and cost of reinsurance
2. 02If actual claims exceed our claims and claim adjustment expense reserves, or if changes in the estimated level of claims and claim adjustment expense reserves are necessary, including as a result of, among other things, changes in the legal/tort, regulatory and economic environments in which the Company operates, our financial results could be materially and adversely affected
3. 03Our business could be harmed because of our continued exposure to asbestos claims and related litigation22% rewritten
4. 04We are exposed to, and may face adverse developments involving, mass tort claims such as those relating to exposure to potentially harmful products or substances
5. 05The effects of emerging claim and coverage issues on our business are uncertain, and court decisions or legislative changes that take place after we issue our policies can result in an unexpected increase in the number of claims and have a material adverse impact on our results of operations and/or our financial position

Financial, Economic and Credit Risks

1. 06During or following a period of financial market disruption or an economic downturn, our business could be materially and adversely affected
2. 07Our investment portfolio is subject to credit and interest rate risk, and may suffer reduced or low returns or material realized or unrealized losses
3. 08We may not be able to collect all amounts due to us from reinsurers, reinsurance coverage may not be available to us in the future at commercially reasonable rates or at all and we are exposed to credit risk related to our structured settlements
4. 09We are exposed to credit risk in certain of our insurance operations and with respect to certain guarantee or indemnification arrangements that we have with third parties
5. 10A downgrade in our claims-paying and financial strength ratings could adversely impact our business volumes, adversely impact our ability to access the capital markets and increase our borrowing costs
6. 11The inability of our insurance subsidiaries to pay dividends to our holding company in sufficient amounts would harm our ability to meet our obligations, pay future shareholder dividends and/or make future share repurchases

Business and Operational Risks

1. 12The 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
2. 13Disruptions to our relationships with our independent agents and brokers or our inability to manage effectively a changing distribution landscape could adversely affect us
3. 14Our efforts to develop new products or services, expand in targeted markets, improve business processes and workflows or pursue acquisitions or dispositions may not be successful and may create enhanced risks
4. 15We may be adversely affected if our pricing and capital models provide materially different indications than actual results
5. 16We are subject to additional risks associated with our business outside the United States
6. 17Loss of or significant restrictions on the use of particular types of underwriting criteria, such as credit scoring, or other data or methodologies, in the pricing and underwriting of our products could reduce our future profitability
7. 18Future pandemics could materially affect our results of operations, financial position and/or liquidity

Technology and Intellectual Property Risks

1. 19Our 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
2. 20If, 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
3. 21Intellectual property is important to our business, and we may be unable to protect and enforce our own intellectual property or we may be subject to claims for infringing the intellectual property of others

Regulatory and Compliance Risks

1. 22Our 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
2. 23We could be adversely affected if our controls designed to ensure compliance with guidelines, policies and legal and regulatory standards are not effective