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Catastrophes Eat into Liberty Mutual's Profit

Source: AP

Posted on 06 Aug 2010

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Property and casualty insurer Liberty Mutual Group on Thursday said its net income fell by 18 percent in the second quarter as losses from catastrophes surged.

The privately held Boston-based insurer said it earned $220 million in the three months ended June 30. That compared with $268 million in the prior year's quarter. Article Controls

Quarterly revenue rose to $8.07 billion from $7.83 billion a year ago as net written premiums climbed 6 percent to $7.28 billion, However, the company's losses from catastrophes such as severe weather grew to $497 million, nearly double the $253 million it lost in the quieter 2009 period.

As a result the combined ratio, which measures and insurance company's loss and expenses, worsened 4.4 points to 104.7 percent.

A ratio above 100 means that for every premium dollar taken in, more than a dollar went to cover claims and expenses. A figure below 100 means the company made a profit on its insurance operations.