December 15, 2017

Liberty Mutual Insurance Reports Second Quarter 2012 Results

Boston, MA -(BusinessWire)- Liberty Mutual Holding Company Inc. and its subsidiaries (collectively “LMHC” or the “Company”) today reported net income of $139 million and $598 million for the three and six months ended June 30, 2012, increases of $318 million and $413 million over the same periods in 2011.

“Second quarter premium growth of 8% was driven by continued momentum in U.S. personal lines, rate increases in U.S. commercial lines, and robust international results despite significant strengthening of the dollar,” said David H. Long, President and CEO of Liberty Mutual Insurance. “Additionally our profitability improved significantly in the quarter despite catastrophe losses continuing to run at an elevated level. The quarter was a busy one, including a significant debt restructuring, the sale of our Argentina workers compensation company, assimilation of KIT in Russia, and gaining approval to begin writing business in India.”

Second Quarter Highlights

  • Revenues for the three months ended June 30, 2012 were $9.157 billion, an increase of $597 million or 7.0% over the same period in 2011.
  • Net written premium (“NWP”) for the three months ended June 30, 2012 was $8.335 billion, an increase of $633 million or 8.2% over the same period in 2011.
  • Pre-tax operating income (“PTOI”) before private limited partnership (“LP”) and limited liability company (“LLC”) income for the three months ended June 30, 2012 was $48 million versus $398 million of pre-tax operating loss before LP and LLC income in the same period in 2011.
  • PTOI for the three months ended June 30, 2012 was $139 million versus $270 million of pre-tax operating loss in the same period in 2011.
  • Loss on extinguishment of debt for the three months ended June 30, 2012 was $148 million, an increase of $108 million over the same period in 2011. $798 million of debt with a weighted average interest rate of 8.03% was repurchased in the quarter and $1.000 billion of senior debt was issued with a weighted average interest rate of 5.73%.
  • Net income attributable to LMHC for the three months ended June 30, 2012 was $139 million versus $179 million of net loss attributable to LMHC in the same period in 2011.
  • Cash flow from operations for the three months ended June 30, 2012 was $574 million, an increase of $259 million or 82.2% over the same period in 2011.
  • The consolidated combined ratio before catastrophesa, net incurred losses attributable to prior yearsb and current accident year re-estimationc for the three months ended June 30, 2012 was 97.4%, an increase of 2.9 points over the same period in 2011. 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 June 30, 2012 decreased 6.6 points to 105.9%.
  • Year-to-Date Highlights

  • Revenues for the six months ended June 30, 2012 were $18.038 billion, an increase of $1.097 billion or 6.5% over the same period in 2011.
  • NWP for the six months ended June 30, 2012 was $16.413 billion, an increase of $1.062 billion or 6.9% over the same period in 2011.
  • PTOI before LP and LLC income for the six months ended June 30, 2012 was $504 million versus $161 million of pre-tax operating loss before LP and LLC income in the same period in 2011.
  • PTOI for the six months ended June 30, 2012 was $716 million, an increase of $539 million over the same period in 2011.
  • Loss on extinguishment of debt for the six months ended June 30, 2012 was $163 million, an increase of $123 million over the same period in 2011. $837 million of debt with a weighted average interest rate of 8.16% was repurchased year-to-date and $1.000 billion of senior debt was issued with a weighted average interest rate of 5.73%.
  • Net income attributable to LMHC for the six months ended June 30, 2012 was $598 million, an increase of $413 million over the same period in 2011.
  • Cash flow from operations for the six months ended June 30, 2012 was $1.225 billion, an increase of $288 million or 30.7% over the same period in 2011.
  • The consolidated combined ratio before catastrophes and net incurred losses attributable to prior years for the six months ended June 30, 2012 was 96.8%, an increase of 1.1 points over the same period in 2011. Including the impact of catastrophes and net incurred losses attributable to prior years, the Company’s combined ratio for the six months ended June 30, 2012 decreased 4.1 points to 103.4%.
  • Financial Condition as of June 30, 2012

    • Total assets were $116.767 billion as of June 30, 2012, a decrease of $84 million from December 31, 2011.
    • Total equity was $18.593 billion as of June 30, 2012, an increase of $994 million over December 31, 2011.

    The full earnings release is available here: Liberty Mutual Second Quarter 2012 Results (PDF)

    Source: BusinessWire

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