The latest financials from Liberty Mutual;
Liberty Mutual Holding Company Inc. and its subsidiaries (collectively “LMHC” or the “Company”) reported net income attributable to LMHC of $721 million and $2.346 billion for the three and nine months ended September 30, 2021, increases of $324 million and $1.750 billion over the same periods in 2020, respectively.
“Despite an elevated level of catastrophe losses, net income attributable to LMHC for the quarter improved to $721 million, up 81.6% from the prior year,” said David H. Long, Liberty Mutual Chairman and Chief Executive Officer. “We continue to experience extraordinary returns in our partnerships, LLC and other equity method investment portfolio which generated $1.0 billion of pre-tax net investment income, up from $467 million, primarily driven by private capital investments. Pre-tax catastrophe losses net of reinsurance in the quarter were $1.2 billion compared to $980 million in the third quarter of 2020 with losses stemming from Hurricane Ida totaling $812 million.
“Topline growth was strong across both of our businesses as net written premium increased 6.5%. Global Retail Markets premium in the quarter grew 5.4% over the same period in 2020, driven by U.S. personal lines where personal auto and homeowners policies in force increased 5.9% and 6.5%, respectively. Global Risk Solutions premium grew 11.3% driven by a combination of rate increases and exposure growth. Core underwriting results in this segment continued to improve, with a 6.5 point decrease in the core loss ratio to 61.1% for the third quarter driven by rate execution, improved risk selection, and lower large loss activity.”
The tables below outline highlights of LMHC’s consolidated financial results for the three months and nine months ended September 30, 2021.
Net Written Premium (“NWP”) by Business:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||
|
$ in Millions |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|
Global Retail Markets |
$7,757 |
$7,358 |
5.4% |
$22,082 |
$20,728 |
6.5% |
|
Global Risk Solutions |
3,834 |
3,445 |
11.3 |
10,771 |
9,917 |
8.6 |
|
Corporate and Other |
(186) |
(93) |
100.0 |
(202) |
(116) |
74.1 |
|
Total NWP |
$11,405 |
$10,710 |
6.5% |
$32,651 |
$30,529 |
7.0% |
|
Foreign exchange effect on growth |
0.4 |
0.9 |
||||
|
NWP growth excluding foreign exchange1 |
6.1% |
6.1% |
||||
|
1 |
Determined by assuming constant foreign exchange rates between periods. |
Consolidated Results of Operations:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||
|
$ in Millions |
2021 |
2020 |
Change |
2021 |
2020 |
Change |
|
Revenues |
$12,370 |
$11,371 |
8.8% |
$35,979 |
$32,000 |
12.4% |
|
PTOI before catastrophes, COVID-19, net incurred losses attributable to prior years and partnerships, LLC and other equity method income |
$824 |
$871 |
(5.4%) |
$2,995 |
$3,093 |
(3.2%) |
|
Catastrophes1 |
(1,214) |
(980) |
23.9 |
(2,914) |
(2,164) |
34.7 |
|
COVID-192 |
– |
– |
– |
– |
(565) |
(100.0) |
|
Net incurred losses attributable to prior years: |
||||||
|
– Asbestos and environmental3 |
1 |
2 |
(50.0) |
– |
2 |
(100.0) |
|
– All other4 |
177 |
(51) |
NM |
231 |
(146) |
NM |
|
Pre-tax operating (loss) income before partnerships, LLC and other equity method income |
(212) |
(158) |
34.2 |
312 |
220 |
41.8 |
|
Partnerships, LLC and other equity method income5 |
1,000 |
467 |
114.1 |
2,792 |
217 |
NM |
|
Pre-tax operating income |
788 |
309 |
155.0 |
3,104 |
437 |
NM |
|
Net realized gains |
20 |
219 |
(90.9) |
83 |
375 |
(77.9) |
|
Unit linked life insurance |
(7) |
(22) |
(68.2) |
(95) |
21 |
NM |
|
Ironshore acquisition & integration costs |
(4) |
(5) |
(20.0) |
(13) |
(16) |
(18.8) |
|
Restructuring costs |
(36) |
(28) |
28.6 |
(147) |
(30) |
NM |
|
Pre-tax income |
761 |
473 |
60.9 |
2,932 |
787 |
NM |
|
Income tax expense |
39 |
70 |
(44.3) |
584 |
170 |
NM |
|
Consolidated net income from continuing operations |
722 |
403 |
79.2 |
2,348 |
617 |
NM |
|
Discontinued operations, net of tax |
– |
(6) |
(100.0) |
– |
(19) |
(100.0) |
|
Consolidated net income |
722 |
397 |
81.9 |
2,348 |
598 |
NM |
|
Less: Net income attributable to non-controlling interest |
1 |
– |
NM |
2 |
2 |
– |
|
Net income attributable to LMHC |
721 |
397 |
81.6 |
2,346 |
596 |
NM |
|
Net income attributable to LMHC excluding unrealized impact6 |
634 |
356 |
78.1 |
2,079 |
648 |
NM |
|
Cash flow provided by continuing operations |
$1,814 |
$2,788 |
(34.9%) |
$4,681 |
$4,906 |
(4.6%) |
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