Liberty Mutual Reports $282M Profit for 3Q

November 1, 2018

Liberty Mutual and its subsidiaries reported net income of $282 million and $1.911 billion for the three and nine months ended Sept. 30, 2018 versus net loss attributable of $665 million and $188 million for the same periods in 2017.

Improvements in net income and in the combined ratio for the Boston-based global insurer were driven primarily by decreased catastrophe activity within the quarter.

David H. Long, chairman and CEO, said the business “continues to develop and diversify across geographies and products as evidenced by net written premium growth in the quarter of 3.4 percent to $10.2 billion with strong growth coming from our international operations.”

Third Quarter Results

Results reported for the three months include:

  • Including the impact of catastrophes the total combined ratio for the three months ended September 30, 2018 was 99.5, a decrease of 17.7 points from the same period in 2017. The decrease primarily reflects lower current year catastrophe losses and net incurred losses attributable to prior years strengthening in 2017 that did not recur in 2018.
  • The consolidated combined ratio before catastrophes was 95.0, an increase of 1.9 points over the same period in 2017, reflecting the impact of higher non-catastrophe loss activity in Global Retail Markets and Global Risk Solutions.
  • Homeowners’ net written premium increased $65 million. The increase reflects rate increases within Global Retail Markets’ U.S. market segment.
  • Global Risk Solutions specialty insurance increased $104 million. The increase reflects new business growth and favorable rate increases, partially offset by additional reinsurance purchased in the current year.
  • Global Risk Solutions reinsurance net written premium increased $96 million. The increase reflects new business growth and favorable rate increases, partially offset by net inwards reinstatement premiums earned in 2017 that did not recur in 2018.
  • Commercial property net written increased $41 million. The increase reflects favorable rate increases.
  • Corporate reinsurance net written premium decreased $77 million. The decrease reflects an accounting change to book ceded written premium for excess of loss contracts at inception of the contract and the net impact of increased property catastrophe reinsurance costs
  • Pre-tax operating income was $312 million versus a loss of $1.290 billion for the same period in 2017. The change reflects lower current year catastrophe losses, the profit margin on growth in earned premium, and Ironshore integration savings. Ironshore acquisition and integration costs for the three months were $7 million, a decrease of $31 million or 81.6% from the same quarter in 2017.

Source: Liberty Mutual

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