WHO WE ARE

Kim: Welcome, everybody, to another episode of the Life at Travelers podcast and what a guest I have with us here today. Here today is, Travelers’ own Chief Sustainability Officer, Yafit Cohn. We are very excited to have you here today. Thanks for coming.

Yafit: Thank you for having me. It’s my pleasure.

Kim: Absolutely. So, before we get into sustainability talk, why don’t you tell us a little bit about yourself, your career journey and how you got to where you are today?

Yafit: Sure. So, I’m a lawyer by training. I always wanted to be a litigator. So, after law school, I went and I practiced securities litigation and government investigations at a large law firm. And then I pivoted after a bunch of years and I started to advise publicly traded companies on securities disclosure issues and corporate governance issues. And back in 2017, I was at my desk and I got a call from Travelers, and I was asked if I would come and crack the ESG (Environmental, Social and Governance) nut for Travelers. And back at the time, ESG was sort of the latest frontier in corporate governance and something that everybody was talking about. And so, for me, personally, it was an exciting opportunity. But the other thing, too, is that for Travelers, Travelers had always been doing so much around sustainability or ESG, whatever it is that you want to call it, and was always integrating relevant environmental, social and governance concepts into its value creation strategy, and so, there was a real opportunity there for the company to tell the story, and a real opportunity for us to be proactive rather than have somebody else tell our story for us. And by that “somebody else,” I mean, let’s say, investors who might assume something about the company that may or may not be true or there are these for-profit rating and rankings firms that will rate public companies on their ESG activities or disclosure. So, we felt like it’s a real opportunity for us to put our best foot forward.

Kim: Absolutely. And can you talk a little bit about your role as Chief Sustainability Officer today?

Yafit: Sure. So, a meaningful portion of that role relates to communicating our sustainable business strategy with other audiences. And that starts, of course, with our sustainability reporting, which is publicly available, it’s meant for investors, employees, customers, really any audience at all.

Kim: Yeah.

Yafit: And as you might imagine, that’s a really big endeavor every year. It takes 200+ subject matter experts around the company to assist in that. So, that’s a piece of it. But, of course, there are other opportunities to communicate and engage with various stakeholders. So, I’m speaking regularly with our institutional investors. I also speak with other stakeholders as the need arises. So, think, for example, regulators or special interest groups who might be interested in talking about one of these topics or one of the two proxy advisory firms, for example. Proxy advisory firms are firms that advise institutional investors with respect to how to vote on items that appear in proxy ballots each year. So, there’s a lot of communication and engagement. Separate from that, I also liaise directly with our Government Relations team. So, you might imagine there are ESG-related issues that come up in a legislative setting or regulatory setting. So, I tend to be involved in some of those efforts if we need to provide feedback on something. In addition to that, I should mention that we have an internal, management-level multidisciplinary Sustainability Committee.

Kim: Okay.

Yafit: And I chair those meetings. I chair the committee, I chair the meetings. And, as I said, it’s multidisciplinary. So, we have folks from accounting, finance, risk, HR, legal, underwriting, etc., on that committee and we meet regularly. We talk about developments in the space. ESG is a very fast-moving space. So, we talk about developments. We brainstorm ideas, with respect to how to manage certain issues and, ultimately, I really use those meetings to make sure that we are all rowing in the same direction…

Kim: Yeah.

Yafit: …as a company. And then I’ll say, lastly, I meet with a lot of employees, I speak at town halls internally and, in general, I really want to make sure that everyone at Travelers understands our approach to sustainability, is very familiar with our initiatives and I really like to point out that a lot of what we have on our Sustainability site, a lot of the initiatives and the programs that we highlight didn’t come from me. Actually, none of them came from me. They all came from employees around the company. So, think from Personal Insurance to Claim to HR, whatever the case may be. So, I really encourage employees around the company to think about potential opportunities for programs or initiatives that create shared value. In other words, where the initiative is beneficial to the company and our ability to create shareholder value over time, and also at the same time is beneficial to any other stakeholder group, like our communities, our customers, our employees, or the environment, if you want to consider that another stakeholder.

Kim: Absolutely. No, that’s, it’s very helpful and, and I want to get into talking about sustainability now. You know, I know that you’re speaking at these town halls, and a lot of events, and chatting with employees. When you’re talking… What, what does sustainability mean at Travelers? How do you explain that?

Yafit: So, that’s a great question, and I think that’s the exact right question to start with, because you can’t really have a conversation about sustainability without understanding what it is that we’re talking about.

Kim: Right.

Yafit: And there is no mutually agreed upon definition of corporate sustainability…

Kim: Right.

Yafit: …which is part of the challenge, honestly, with the whole discipline. So, one of the first things that I did when I came to Travelers was to try to define sustainability for Travelers.

Kim: Yup.

Yafit: And one of the ways in which I did that was by speaking with as many institutional investors as possible. I spent about three months doing nothing but speaking with investors, and I hit almost half of our investor base in shares outstanding at the time, and we had conversations about lots of different topics. I wanted to understand how it is that they were thinking about ESG, or sustainability, I use the terms interchangeably, but I wanted to understand, from them, how they were thinking about it, how they incorporate ESG factors into their investment decisions, and I really wanted to understand what topics they felt a P&C insurance company like Travelers should really be thinking about and including in its public-facing sustainability reporting.

Kim: Right.

Yafit: So, as a consequence of all those discussions, I landed on a definition for myself, and for Travelers, of sustainability, which is essentially that sustainability is about risks and opportunities. It’s about the risks and opportunities that could potentially impact a company’s ability to create shareholder value over the long term, and how a company manages those risks and takes advantage of those opportunities in an effort to ensure the company’s long-term success.

Kim: Okay.

Yafit: So, if you think about it, it’s really about a holistic approach to value creation and it’s really, I think, a recognition of what Travelers and other successful companies have long understood, which is that we cannot create long-term shareholder value without also taking care of our customers, our communities and our employees.

Kim: The Travelers Promise.

Yafit: Exactly. So, that, that’s a piece of it, right? When you look at our public-facing Sustainability site, you see front and center that, for us, sustainability comes down to three things: Perform, in other words, our ability to execute on our financial strategy, our long-term financial strategy. Second is transform, and that’s, of course, a reference to our innovation agenda to ensure that we’re able to remain relevant and differentiating long term, tomorrow as well as today. And then third is our Travelers Promise, right? It’s our commitment to our customers, our communities and our employees. And our CEO, Alan Schnitzer, talks about that in his introduction to the Sustainability site as well. So, if you think about it, while at times there could be overlap, sustainability is about value rather than values.

Kim: That’s great. And in what ways do our employees contribute to Travelers’ long-term sustainability?

Yafit: So, that’s a great question, too. I mentioned earlier that we have over 200 subject matter experts internally, around the company, who contribute to our effort to report on our sustainability efforts every year. So, that’s a piece of it. But also, there are so many programs and initiatives that we outline in our sustainability reporting, and so many employees around the company who are contributing in some way to those programs or initiatives, so, from Personal Insurance to Claim to HR, and the list goes on. But, I really wanted to say one more thing, which is that, if you think about how I define sustainability, in terms of ensuring the long-term success of our company, every single employee at this company, no matter their level or role, has a very important role to play in the long-term sustainability of the company. So, it doesn’t matter what you’re doing, but you are part of that perform, or transform or Travelers Promise, or more than one of the above.

Kim: Absolutely. And how would you explain how sustainability is woven into our culture here? You know, for, a lot of our listeners are considering a career Travelers. So, how would you, how would you explain that?

Yafit: So, our culture is very important to us and really serves as the foundation of everything that we do at Travelers, so much so that we actually put pen to paper to try to define what that culture is. And so, when you look at our Sustainability site or report, what you’ll see is essentially four components that we’ve tried to boil down our culture to. The first is, putting the place first. And by “the place,” we mean Travelers. The second component is long-term thinking. As much as we’re focused on reports for the next quarter, we’re really focused on our success for the next quarter century. The third component is collaboration. We understand that true collaboration means that we can take risks, we can take advantage of opportunities and we can ultimately make better business decisions and be more successful over the long term. And finally, the fourth component is a commitment to everybody else’s success. So, think about how powerful that can make the organization when you walk into work every day and you know that 30,000 people are rooting for you.

Kim: Yeah, it’s quite the corner.

Yafit: Yes it is. I think Travelers is just such a special place for those reasons and more. But, when you think about all of that and how it connects to sustainability, I would say two things. First of all, I mentioned long-term thinking and sustainability, by definition, is about long-term thinking. What will sustain our success for a very long time to come? And the second point is, this culture that I just outlined for you is a culture that has sustained our success for over 170 years, and we feel that if we maintain it, we will be successful for the next 170 years and beyond.

Kim: Now, Yafit, earlier you mentioned our sustainability reporting. I know on the Sustainability Report we identify 16 key drivers of sustained value. Can you tell us how we landed on those topics, and maybe share some examples of what we’re doing as a company in those areas?

Yafit: Yes, absolutely. So, I mentioned earlier that I went out and spoke to our investors back in 2017 and 2018, and that was a big part of that process. And so, I really wanted to understand, from them, what they felt was very important for a P&C insurance company. But we didn’t stop there. We also had a series of internal conversations, each of which was focused on a different stakeholder group. So, in addition to investors, customers, our agent and broker partners, our employees and even Travelers itself, and what we really wanted to understand were, what were the key issues that these stakeholders were thinking about as it pertains to a P&C insurance company that would really help drive sustained value at a company like Travelers? And that’s how we landed on those 16 key drivers. One of the things that I like to point out to people, by the way, about those drivers is that, when you look at them, you see a bunch of topics that you would expect to see as key drivers of sustained value at a P&C insurance company or at a large publicly-traded corporation. Let’s say, Corporate Governance, or Investment Management or Capital & Risk Management. But we also discussed many other topics that some would call ESG, like Climate Strategy, like Human Capital Management, like Safety & Health. But, ultimately, for us, all of them are part of the value creation mosaic at Travelers and all of them put together ladder up to our financial performance. I’ll mention a few examples of some of the initiatives that we discuss on the website. These come from the Illustrative Initiatives portion of the website. Those are essentially highlight stories that really bring to life some of the key drivers of sustained value on our website. So, think about, for example, the partnership that we have with American Forests, which is a conservation group. We have committed to fund the planting or the conservation of one tree for every Personal Insurance billing account that’s converted to paperless billing. So, of course, that has environmental benefits, but it also saves us millions in paper and postage costs. And thus far, as of the end of 2024, we have funded the planting or conservation of 5 million trees, which is a really big deal.

Kim: Yes it is.

Yafit: Another example I’ll bring up, which is very different, is our Early Severity Predictor®, which is a model that we use in our workers compensation business. And that model tends to predict when an injured employee is likely to develop chronic pain and, as you know, chronic pain is often treated with opioids or other painkillers.

Kim: Right.

Yafit: So, by adjusting medical care and resources, the Early Severity Predictor model can help address potential drivers of chronic pain and then hopefully reduce the likelihood of an employee ending up on opioids. And so that, of course, helps injured employees, that also helps save Travelers money in opioid-related loss claims.

Kim: Okay.

Yafit: So, if you think about, by the way, both of those examples that I mentioned, they’re very different, but there’s a common denominator between both of them, and I would say, among all of the illustrative initiatives that we mention on our website, and that is that concept of shared value, which I mentioned earlier. So, again, those are initiatives that enhance the company’s ability to create shareholder value over time and also benefit other stakeholders. So, that’s a real win-win for us.

Kim: Absolutely. And these efforts that you’re making, how do you measure the success of those?

Yafit: I like this question a lot because it gets asked a lot and also, it doesn’t have a great answer. It’s one of the real challenges that we have with sustainability, because there are a lot of topics and areas that we discuss on our website that are ultimately not quantifiable.

Kim: Right.

Yafit: Like, how do you measure a company’s culture, like we were talking about earlier? How do you measure how good a company is, quote unquote, with respect to ethics and values? Or how do you boil down a company’s climate risk management to a number? I’m not sure if you can do any of those things, but all that being said, there are some metrics that we do provide on our website. And I would say, we really try to provide quantitative information where we have the data, we’re comfortable that it’s accurate, we think it’s meaningful, it provides some sort of meaningful information and ultimately, we don’t feel like there are significant unintended consequences in disclosing that information that override any benefit of producing it.

Kim: Sure.

Yafit: So, I’ll give you a few examples. We disclose, for example, our customer retention rates. We also disclose the percentage of catastrophe claims that were resolved within 30 days of receipt of claim notice, as well as the percentage of catastrophe claims that were paid within a week of inspection or even the same day of inspection.

Kim: Okay.

Yafit: And the reason that we provide that is because we feel that it’s indicative of our customer service.

Kim: Yep.

Yafit: Separate from all of that, we also disclose our average tenure at Travelers, as well as voluntary employee turnover rates.

Kim: Okay.

Yafit: And we feel that those are indicative of our Human Capital Management efforts and the attachment that our employees ultimately feel to the organization.

Kim: Right.

Yafit: So, that’s meaningful. And then the last example I’ll bring up is you probably know that we have a commitment to become carbon neutral in our owned operations by 2030.

Kim: That’s right.

Yafit: And so, we disclose our Scope 1 and Scope 2 greenhouse gas emissions.

Kim: They’re great examples, Yafit. And I’m curious now, given the current environment, have you made any changes recently to your approach to sustainability at Travelers?

Yafit: No, we really haven’t at all. And that’s because we’ve always been and we continue to be laser-focused on the fact that we are stewards of our shareholders’ capital. And so, when we’re faced with any sort of decision at the company that relates to any so-called ESG issue, what we’re really focused on is whether that particular action will enhance shareholder value over time. And we’re focused specifically on actions that would be beneficial to the company’s shareholders, long-term shareholders, and also, to other stakeholder groups like I mentioned earlier. So, that sweet spot of shared value.

Kim: Yep.

Yafit: I will say there are many groups out there that have been pressuring public companies to take action on a variety of environmental, social and political issues that may or may not be tethered to shareholder value. And that pressure on public companies has really been coming from both sides of the political aisle. It tends to be very tricky to navigate, and it really gives rise to a monumental challenge for public companies and the CSOs that advise them to really make sure that the company sticks to what will be in the best interest of the company and enable it to create long-term shareholder value.

Kim: Absolutely. The information you’ve been giving, your honesty, transparency, it’s so appreciated. I know we covered a lot today. If our listeners want to learn more, where can they go?

Yafit: I would encourage all of our listeners to visit sustainability.travelers.com. That’s where you’ll find all of our sustainability reporting. And I promise you, even if you’re familiar with the company already, you will definitely learn something new.

Kim: Excellent. And to finish off our chat here, Yafit, there’s a question I ask every single one of my guests at the end, and that is, what advice would you give to someone who’s interested in pursuing a career at Travelers? Growing in their career at Travelers? What would your advice be?

Yafit: I will share three tips based on my own experience, and I think these are applicable no matter what your role, no matter what your level. I would say, first of all, take initiative and work really hard at what you do. Make sure you’re raising your hand when possible. Become that subject matter expert, that go-to person that everybody wants to come to. Be helpful to anyone and everyone. And I promise you, you will reap the benefits of that. Secondly, I would say networking is really important. Make sure you network and create relationships, develop relationships with as many people around the company as possible. First of all, you don’t know when you will need those connections in the future, and second of all, additional opportunities that you might not even be able to fathom today might arise in the future as a result of those relationships. And third, it’s really important to advocate for yourself. Don’t be afraid to do that. So, as I said before, raise your hand. Don’t be afraid to ask to be put on that all-star team, to ask for that stretch assignment, to ask for certain assignments that will round out your skills in other areas. The worst that can happen is somebody says no to you.

Kim: Right. I would say you’re the epitome of your three tips.

Yafit: Thank you.

Kim: Absolutely.

Yafit: That’s too kind.

Kim: Thank you so much for being here today. We so appreciate it. And, for those who want to learn more, please visit our Sustainability site that Yafit mentioned. And past that, we’ll have another episode for you back on this podcast very soon. Yafit, thanks so much for being here.

Yafit: Thanks for having me.

Kim: Appreciate it.