BOSTON, May 9, 2024
/PRNewswire/ -- Liberty Mutual Holding Company Inc. and its
subsidiaries (collectively "LMHC" or the "Company") reported net
income attributable to LMHC of $1.535
billion for the three months ended March 31, 2024, versus a net loss attributable to
LMHC of $74 million for the same
period in 2023.
"For the first quarter, we reported net income attributable to
LMHC of $1.5 billion driven by strong
core underwriting results and a $663
million after-tax benefit from the gain on the sale of our
GRM West Operations," said Tim
Sweeney, Liberty Mutual President & Chief Executive
Officer. "Underwriting results continue to improve, with a 2.8
point improvement in the underlying loss ratio to 62.1% for the
first quarter driven by rate execution and other underwriting
actions. Catastrophe losses were in line with expectations for the
quarter and improved 2.3 points from the prior year. In total, the
loss ratio improved 5.9 points to 69.5%. Our US Retail Markets
segment saw 5.2 points of improvement in the underlying loss ratio
compared to the prior year driven by targeted rate actions
continuing to earn in and favorable frequency trends. Despite
higher current year large loss activity, Global Risk Solutions
total combined ratio improved 3.9 points from the prior year to
94.2%. Our ongoing expense management program drove a 2.5 point
reduction in the consolidated expense ratio to 26.3%. Overall, it
was a strong quarter and we are pleased with the solid progress we
continue to make on profit improvement as we march towards our 95%
combined ratio target in 2025."
The tables below outline highlights of LMHC's consolidated
financial results for the three months ended March 31, 2024.
Net Written Premium ("NWP") by Business:
Consolidated NWP by business was as follows:
|
Three Months
Ended
March
31,
|
$ in
Millions
|
2024
|
2023
|
Change
|
US Retail
Markets
|
$6,545
|
$6,943
|
(5.7 %)
|
Global Risk
Solutions
|
4,376
|
4,219
|
3.7
|
Corporate and
Other
|
37
|
(7)
|
NM
|
Total
NWP
|
$10,958
|
$11,155
|
(1.8 %)
|
Foreign
exchange effect on growth
|
|
|
0.1
|
NWP growth
excluding foreign exchange1
|
|
|
(1.9 %)
|
1
|
Determined by assuming
constant foreign exchange rates between periods.
NM = Not Meaningful
|
Consolidated Results of Operations:
|
Three Months
Ended
March
31,
|
$ in
Millions
|
2024
|
2023
|
Change
|
Revenues
|
$12,475
|
$11,928
|
4.6 %
|
Underlying PTOI before
limited partnerships income
|
1,926
|
1,094
|
76.1
|
Catastrophes
|
(824)
|
(1,075)
|
(23.3)
|
Net
incurred losses attributable to prior years:
|
|
|
|
- Asbestos and
environmental1
|
-
|
-
|
-
|
- All
other2
|
6
|
(104)
|
NM
|
Pre-tax operating
income (loss) before limited partnerships income
|
1,108
|
(85)
|
NM
|
Limited partnerships
income (loss)3
|
159
|
(84)
|
NM
|
Pre-tax operating
income (loss)
|
1,267
|
(169)
|
NM
|
Net realized
losses
|
(92)
|
(49)
|
87.8
|
Acquisition &
integration costs
|
(21)
|
(12)
|
75.0
|
Restructuring
costs
|
(6)
|
(2)
|
200.0
|
Pre-tax income
(loss)
|
1,148
|
(232)
|
NM
|
Income tax expense
(benefit)
|
270
|
(50)
|
NM
|
Consolidated net income
(loss) from continuing operations
|
878
|
(182)
|
NM
|
Discontinued
operations, net of tax
|
663
|
115
|
NM
|
Consolidated net income
(loss)
|
1,541
|
(67)
|
NM
|
Less: Net income
attributable to non-controlling interest
|
6
|
7
|
(14.3)
|
Net income (loss)
attributable to LMHC
|
1,535
|
(74)
|
NM
|
Net income (loss)
attributable to LMHC excluding unrealized
impact4
|
1,543
|
(63)
|
NM
|
Cash flow provided by
continuing operations
|
$901
|
($18)
|
NM
|
1.
|
Asbestos and
environmental is gross of the related adverse development
reinsurance (the "NICO Reinsurance Transaction", which is described
further in Reinsurance).
|
2.
|
Net of earned premium
and reinstatement premium attributable to prior years of $8 million
for the three months ended March 31, 2024, and ($5) for the same
period in 2023.
|
3.
|
Limited partnerships
income includes LP, LLC and other equity method income within net
investment income in the accompanying Consolidated Statements of
Operations and revenue and expenses from direct investments in
natural resources.
|
4.
|
Excludes unrealized
gains on equity securities, unit linked life insurance, and the
corresponding tax impact.
|
NM = Not
Meaningful
|
Combined Ratio:
|
Three Months
Ended
March
31,
|
CONSOLIDATED
|
2024
|
2023
|
Change
(Points)
|
Combined
ratio
|
|
|
|
Claims and claim
adjustment expense ratio
|
62.1 %
|
64.9 %
|
(2.8)
|
Underwriting expense
ratio
|
26.3
|
28.8
|
(2.5)
|
Underlying combined
ratio
|
88.4
|
93.7
|
(5.3)
|
Catastrophes
|
7.2
|
9.5
|
(2.3)
|
Net incurred losses
attributable to prior years:
|
|
|
|
- Asbestos
and environmental
|
-
|
-
|
-
|
- All
other1
|
0.2
|
1.0
|
(0.8)
|
Total combined
ratio
|
95.8 %
|
104.2 %
|
(8.4)
|
1.
|
Net of earned premium
and reinstatement premium attributable to prior years.
|
2.
|
The combined ratio,
expressed as a percentage, is a measure of underwriting
profitability. This measure should only be used in
conjunction with, and not in lieu of, underwriting income and may
not be comparable to other performance measures used by the
Company's competitors. The combined ratio is computed as the
sum of the following property and casualty ratios: the ratio of
claims and claim adjustment expense less managed care income to
earned premium; the ratio of insurance operating costs plus
amortization of deferred policy acquisition costs less third-party
administration income and fee income (primarily related to the
Company's involuntary market servicing carrier operations) and
installment charges to earned premium; and the ratio of
policyholder dividends to earned premium. Provisions for
uncollectible premium and reinsurance are not included in the
combined ratio unless related to an asbestos and environmental
commutation and certain other run off. Restructuring and
acquisition and integration costs are not included in the combined
ratio.
|
Equity:
|
As
of
March
31,
|
As of
December 31,
|
|
$ in
Millions
|
2024
|
2023
|
Change
|
Unassigned
equity
|
$31,526
|
$29,991
|
5.1 %
|
Accumulated other
comprehensive loss
|
(5,250)
|
(5,127)
|
2.4
|
Non-controlling
interest
|
196
|
196
|
-
|
Total equity
|
$26,472
|
$25,060
|
5.6 %
|
Subsequent Events
In April 2024, GRS announced a
single unified strategy in Asia
Pacific, critical to seize the significant opportunity in
the region. This includes the introduction of Liberty
International Insurance ("LII"), a single demand pillar
incorporating Liberty Specialty Markets ("LSM") and Asia Retail
Markets ("ARM") businesses to drive our strategy. This change
will be effective for second quarter reporting.
Management has assessed material subsequent events through
May 8, 2024, the date the financial
statements were available to be issued.
Financial Information
The Company's financial results, management's discussion and
analysis of operating results and financial condition, accompanying
financial statements and other supplemental financial information
for the three months ended March 31,
2024 are available on the Company's Investor Relations
website at www.libertymutualgroup.com/investors.
About Liberty Mutual Insurance
At Liberty Mutual, we believe progress happens when people feel
secure. By providing protection for the unexpected and delivering
it with care, we help people embrace today and confidently pursue
tomorrow.
In business since 1912, and headquartered in Boston, today we are the eighth largest global
property and casualty insurer based on 2023 gross written premium.
We also rank 86th on the Fortune 100 list of largest
corporations in the US based on 2022 revenue. As of December 31, 2023, we had $49.4 billion in annual consolidated revenue.
We employ over 45,000 people in 29 countries and economies
around the world. We offer a wide range of insurance products and
services, including personal automobile, homeowners, specialty
lines, reinsurance, commercial multiple-peril, workers
compensation, commercial automobile, general liability, surety, and
commercial property.
For more information, visit www.libertymutualinsurance.com.
Cautionary Statement Regarding Forward Looking
Statements
This report contains forward looking statements that are
intended to enhance the reader's ability to assess the future
financial and business performance of the Company. Forward looking
statements include, but are not limited to, statements that
represent the Company's beliefs concerning future operations,
strategies, financial results, investment market fluctuations, or
other developments, and contain words and phrases such as "may,"
"expects," "should," "believes," "anticipates," "estimates,"
"intends" or similar expressions. Because these forward-looking
statements are based on estimates and assumptions that are subject
to significant business, economic and competitive uncertainties,
many of which are beyond the Company's control or are subject to
change, actual results could be materially different.
Contact:
|
Investor
Relations
|
Media
Relations
|
|
Robert Pietsch
|
Rich Angevine
|
|
857-224-6655
|
617-833-0926
|
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SOURCE Liberty Mutual Insurance