When an S&P Global Ratings executive asked the leader of Travelers how current challenges like tariff uncertainty, inflation, geopolitical risks influence the insurer’s strategy, Alan Schnitzer delivered an answer than Larry Wilkinson may not have expected.
“Really not much,” said Schnitzer, the chair and chief executive officer of The Travelers Companies during an early session of the S&P Global Ratings 41st Annual Insurance Conference in early June.
Wilkinson, the head of U.S. Property/Casualty Insurance at S&P, referenced the economic and geopolitical headwinds after Managing Director & Property/Casualty Sector Lead Neil Stein listed them as watchlist items for the rating agency at the session immediately proceeding the interview with Schnitzer. And while Schnitzer later agreed that social inflation and the overall economic fallout of geopolitical uncertainty in the world were challenges “of the moment,” offering his take on strategies to deal with such risks, the CEO said, “You can’t reposition an insurance company quickly, and do it gracefully.”
“You always have to be thinking about the longer term when running an insurance company,” Schnitzer said. “Some degree of uncertainty is always in our consciousness,” he said, noting that the specific current risks highlighted by S&P analysts are things Travelers executives think about all the time.
He went on to recall scenario planning that he and Travelers Chief Financial Officer did during the first two weeks of the COVID pandemic. “What could happen? What would really be a very bad day for Travelers, the two men asked one another during two weeks of phone conversations back in 2020. “Honestly, we stress-tested every aspect of our business and we couldn’t come up with one,” he said.
At the time, he said, many distribution partners were “in a real liquidity crunch. And our confidence in our business and our balance sheet and our liquidity and our business model put us in a position where we could actually…advance more than a hundred million dollars in commissions to our trading partners” in those early days of the pandemic.
“Running this business for uncertainty is just a way of life for us,” Schnitzer stated.
