Liberty Mutual profits hike by 26%
Liberty Mutual enjoyed a strong third quarter as its profits hiked 26.6 percent and it benefitted from its stop loss reinsurance agreement with Berkshire Hathaway.
Its profits hit $609 million and $1.3 billion for the three and nine months ended September 30, 2014, increases of $128 million and $27 million over the same periods in 2013.
The insurer’s total revenues grew to $10.1 billion in the third quarter of 2014, an increase of $247 million or 2.5 percent from $9.8 billion in the same period in 2013.
Its combined ratio for the three months ended September 30, 2014 improved 2.4 points to 96.6 percent.
Following the reinsurance transaction, Liberty Mutual recorded $85 million of net asbestos and environmental (A&E) and workers compensation adverse development. As a result of the NICO reinsurance transaction, the company was able to recognize the $85 million as a benefit to income.
“We had a solid third quarter, with net written premium growth of 2.8 percent, net income of $609 million and an improvement of 2.4 points in the combined ratio,” said David Long, Liberty Mutual Insurance chairman and chief executive officer.
“We also completed two significant capital-related transactions. We entered into a reinsurance agreement with National Indemnity Company, substantially mitigating the uncertainty of certain long-tail liabilities, and raised $1.05 billion in debt. These transactions further strengthened the balance sheet and the overall financial position of the company.”