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Liberty Mutual First-Quarter Profit Off 31% Amid Investment Losses

Source: WSJ

Posted on 03 May 2013 by Neilson

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Liberty Mutual 2013 first quarter profitsLiberty Mutual Holding Co.'s first-quarter earnings fell 31% as the property and casualty insurer posted net realized investment losses, though the company used a smaller portion of its premiums to cover claims.

Liberty Mutual, like many other insurers, had been benefiting from lower catastrophe losses for most of last year but was hit by a surge of such losses during the fourth quarter as a result of Sandy, which hit the Northeast in October. For the latest quarter, the company posted catastrophe losses of $207 million, down from $359 million a year earlier.

President and Chief Executive David H. Long said some degree of the improved results was masked by the impact of the Venezuelan currency devaluation, which he said will be substantially offset over the remainder of the year.

Mr. Long also said the company's moves to raise prices or contract in underperforming lines were gaining traction while noting that Liberty Mutual's combined ratio--a measure of the portion of premiums used to cover claims--was down 2.6 percentage points at 98.3% in the latest quarter.

Liberty Mutual reported a profit of $318 million, down from $459 million a year earlier. Net realized investment losses were $197 million, compared with net realized investment gains of $49 million a year earlier. Revenue increased 3% to $9.15 billion and net premiums written were up 6.4%.

The company, owned by its policyholders, doesn't have publicly traded stock and voluntarily reports its quarterly results.