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Liberty Mutual Group reported net income of $565 million and $1.245 billion for the three and 12 months ended Dec. 31, 2004, respectively, representing a $130 million and $394 million increase over the same periods in 2003.
“In 2004, we achieved record earnings of $1.2 billion, double digit growth in surplus and almost $3.2 billion of cash flow from operations. We achieved all of this and more despite a very difficult catastrophe environment and our decision to increase pollution reserves by $316 million following a comprehensive review by an independent actuary,” said Edmund Kelly, Liberty Mutual Group chairman, president and CEO.
Fourth Quarter 2004 highlights
— Revenues for the three months ended Dec. 31, 2004 were $5.274 billion, a $780 million or 17.4% increase over the same period in 2003.
— Net written premium for the three months ended Dec. 31, 2004 was $4.109 billion, a $569 million or 16.1% increase over the same period in 2003.
— Pre-tax operating income for the three months ended Dec. 31, 2004 was $409 million, a $146 million or 55.5% increase over the same period in 2003. Results for 2004 include $232 million of incurred losses related to the completion of the company’s comprehensive review of pollution reserves in the fourth quarter of 2004.
— Cash flow from operations for the three months ended Dec. 31, 2004 was $672 million, a $68 million or 9.2% decrease from the same period in 2003.
— The combined ratio before catastrophes, net incurred losses attributable to prior years and discount accretion for the three months ended Dec. 31, 2004 was 91.7%, a 5.9 percentage point improvement over the same period in 2003. Including the impact of catastrophes, net incurred losses attributable to prior years and discount accretion, the company’s combined ratio improved 4.2 percentage points to 98.3% in 2004.
Year-to-Date 2004 highlights
— Revenues for the 12 months ended Dec. 31, 2004 were $19.641 billion, a $3.023 billion or 18.2% increase over the same period in 2003.
— Net written premium for the twelve months ended Dec. 31, 2004 was $17.321 billion, a $2.839 billion or 19.6% increase over the same period in 2003.
— Pre-tax operating income for the twelve months ended Dec. 31, 2004 was $907 million, a $503 million or 124.5% increase over the same period in 2003. Results for 2004 include $697 million of catastrophe losses and $316 million of net incurred losses attributable to prior years related to the completion of the company’s comprehensive review of pollution reserves.
— Cash flow from operations for the 12 months ended Dec. 31, 2004 was $3.188 billion, a $509 million or 19.0% increase over the same period in 2003.
— The combined ratio before catastrophes, net incurred losses attributable to prior years and discount accretion for the 12 months ended Dec. 31, 2004 was 95.0%, a 3.4 percentage point improvement over the same period in 2003. Including the impact of catastrophes, net incurred losses, attributable to prior years and discount accretion, the company’s combined ratio improved 1.6 percentage points to 102.9% in 2004.