Liberty Mutual Posts 2Q Earnings

Second-quarter earnings for Liberty Mutual, one of the largest auto and home insurers in the U.S., fell by 18 percent in the wake of catastrophe losses that increased twofold.

Source: Source: Wall St. Journal | Published on August 9, 2010

The property-and-casualty insurance industry is coming off a quiet 2009, in which big events causing insurance damages--such as storms--were muted. But that has changed this year between wicked weather and such natural disasters as earthquakes.

In the second quarter, catastrophe losses for Liberty Mutual skrocketed 96% to $497 million. As such, earnings fell to $220 million from $268 million a year earlier. Partially offsetting the catastrophe costs was the company recording $5 million in so-called private-equity income, compared with a prior-year loss of $20 million.

Revenue rose 3% to $8.07 billion as net premiums written increased 5.5% to $7.28 billion.

Excluding catastrophes and net incurred losses attributable to prior years, Liberty Mutual's combined ratio--the percentage of premiums it paid out on losses--decreased 2.3 percentage points to 96.6%. Unadjusted, it rose 4.4 points to 104.7%.

Liberty Mutual doesn't have a publicly traded stock and voluntarily reports its quarterly results. The company is owned by its policyholders.