How Liberty Mutual Did in Q3

November 4, 2016

Liberty Mutual Holding Co. and its subsidiaries reported net income of $455 million and $863 million for the three and nine months ended Sept. 30, 2016, respectively, versus a $427 million loss and $103 million gain for the same periods in 2015.

Consolidated net premium written rose six percent for the quarter while the combined ratio improved a point despite continued increase in loss trends within U.S. personal auto liability

David H. Long, Liberty Mutual Insurance chairman and CEO, said each of Liberty Mutual’s strategic business units “delivered better than expected growth in the quarter.”

The consolidated net written premium for the three months was $9.309 billion, an increase of $534 million or 6.1 percent over the same period in 2015.

The quarter’s consolidated combined ratio before catastrophes was 94.2, an improvement of 1.2 points over the same period in 2015. Including catastrophes, the company’s combined ratio for the three months increased 2.2 points to 97.8.

Private passenger automobile net written premium increased $185 million and $382 million in the quarter and year, respectively. The company said the increases reflect rate, model year increases, and growth in policies in-force in U.S. Consumer Markets, along with growth in International Consumer Markets primarily driven by the an acquisition in Chile (January 2016). This was partially offset by the strengthening of the U.S. dollar and the exit from the personal insurance market in Great Britain.

Homeowners net written premium grew by $53 million and $144 million in the quarter and year, respectively. The company said increases reflect rate and coverage increases as well as growth in homeowners policies in-force in the U.S market.

Specialty insurance premium increased by $61 million in the quarter and decreased by $90 million year-to-date. The company said both periods reflect favorable premium adjustments that were more than offset in the year by re-underwriting and pricing actions, competitive market conditions, and the strengthening of the U.S. dollar.

Commercial automobile premium increased $51 million and $103 million in the quarter and year, respectively. The increases reflect higher new business sales, rate increases and higher retention, according to the insurer.

Third Quarter Actions

On Sept. 30, the company completed the sale of substantially all the assets and liabilities of its Polish operation resulting in an immaterial gain. Liberty Ubezpieczenia had approximately $90 million of net written premium in 2015.

On Sept. 6, the company determined to sell and actively market its 10 St. James and 75 Arlington properties in Boston. It expects a gain on the sale.

On Aug. 16, the company entered into an agreement to sell a 51 percent interest of its Chinese operations to Sanpower Group. The transaction is subject to regulatory approval.

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