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Liberty Mutual Reports Q3 Net Loss, Due to Cat Losses, Absestos Charge


Posted on 07 Nov 2011

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Liberty Mutual Group on Friday reported a net loss of $111 million and net income of $81 million for the three and nine months ended September 30, 2011, versus net income of $567 million and $1.1 billion in the same periods in 2010.

“Severe weather and an increase in our asbestos-related reserves overshadowed strong and improving core performance and resulted in a loss for the quarter,” remarked David H. Long, President and CEO of Liberty Mutual Group. “Our domestic personal lines operations grew at a faster rate than the industry with solid core profitability; our international companies grew at a double digit rate with improved profitability; and our domestic commercial lines businesses achieved price increases higher than the prior quarter. We remain committed to disciplined underwriting and will shed business where we cannot write a risk at an adequate return.”

Third Quarter Highlights

*Revenues for the three months ended September 30, 2011 were $8.767 billion, an increase of $380 million or 4.5% over the same period in 2010.

*Net written premium for the three months ended September 30, 2011 was $8.155 billion, an increase of $435 million or 5.6% over the same period in 2010.

*Pre-tax operating loss before private equity income for the three months ended September 30, 2011 was $341 million versus $513 million of pre-tax operating income before private equity income in the same period in 2010.

*Pre-tax operating loss for the three months ended September 30, 2011 was $203 million versus $658 million of pre-tax operating income in the same period in 2010.

*Net loss for the three months ended September 30, 2011 was $111 million versus $567 million of net income in the same period in 2010.

*Cash flows from operations for the three months ended September 30, 2011 were $572 million, a decrease of $137 million or 19.3% from the same period in 2010.

*The consolidated combined ratio before catastrophes1 , net incurred losses attributable to prior years2 and current accident year re-estimation for the three months ended September 30, 2011 was 97.9%, no change from the same period in 2010. Including the impact of catastrophes, net incurred losses attributable to prior years and current accident year re-estimation, the Company’s combined ratio for the three months ended September 30, 2011 increased 11.4 points to 110.5%


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