December 7, 2017

Liberty Mutual Insurance Reports Fourth Quarter and Full Year 2013 Results

Boston, MA – Liberty Mutual Holding Company Inc. and its subsidiaries recently reported net income (loss) of $496 million and $1.743 billion for the three and twelve months ended December 31, 2013, versus ($234) million and $829 million in the same periods in 2012.

“2013 operating results showed marked improvement as we continued to grow selectively and improve underwriting profitability,” said David H. Long, Chairman and CEO of Liberty Mutual Insurance. “Our personal lines business grew 11%, among the highest in the industry, while our commercial business focused on reducing exposures in certain lines and strengthening underwriting across the board. Overall, net written premium grew 6.7% and net income increased to $1.7 billion.

“We have excellent momentum heading into 2014 and our focus on profitable growth remains unchanged.”

Fourth Quarter Highlights

  • Revenues for the three months ended December 31, 2013 were $9.983 billion, an increase of $518 million or 5.5% over the same period in 2012.
  • Net written premium (“NWP”) for the three months ended December 31, 2013 was $8.787 billion, an increase of $440 million or 5.3% over the same period in 2012.
  • Pre-tax operating income (“PTOI”) for the three months ended December 31, 2013 was $625 million versus pre-tax operating loss of $529 million in the same period in 2012.
  • Pre-tax loss on extinguishment of debt for the three months ended December 31, 2013 was $55 million, an increase of $25 million or 83.3% over the same period in 2012. Ninety-seven million dollars of debt at an interest rate of 10.75% was repurchased in the quarter, and $400 million of senior debt was issued with an interest rate of 4.25%.
  • Net income attributable to LMHC for the three months ended December 31, 2013 was $496 million versus net loss attributable to LMHC of $234 million in the same period in 2012.
  • Cash flow from operations for the three months ended December 31, 2013 was $1.094 billion, an increase of $450 million or 69.9% over the same period in 2012.
  • The consolidated combined ratio before catastrophes1, net incurred losses attributable to prior years2 and current accident year re-estimation3 for the three months ended December 31, 2013 was 96.3%, a decrease of 0.7 points from the same period in 2012. 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 December 31, 2013 decreased 12.5 points to 100.4%.

Year-to-Date Highlights

  • Revenues for the twelve months ended December 31, 2013 were $38.509 billion, an increase of $2.184 billion or 6.0% over the same period in 2012.
  • NWP for the twelve months ended December 31, 2013 was $35.224 billion, an increase of $2.211 billion or 6.7% over the same period in 2012.
  • PTOI for the twelve months ended December 31, 2013 was $2.455 billion, an increase of $1.774 billion over the same period in 2012.
  • Pre-tax loss on extinguishment of debt for the twelve months ended December 31, 2013 was $211 million, an increase of $18 million or 9.3% over the same period in 2012. Three hundred and sixty-five million dollars of debt at an interest rate of 10.75% was repurchased in 2013 and $1 billion of senior debt was issued with an interest rate of 4.25%.
  • Net income attributable to LMHC for the twelve months ended December 31, 2013 was $1.743 billion, an increase of $914 million or 110.3% over the same period in 2012.
  • Cash flow from operations for the twelve months ended December 31, 2013 was $4.157 billion, an increase of $1.328 billion or 46.9% over the same period in 2012.
  • The consolidated combined ratio before catastrophes and net incurred losses attributable to prior years for the twelve months ended December 31, 2013 was 95.4%, a decrease of 1.6 points from the same period in 2012. Including the impact of catastrophes and net incurred losses attributable to prior years, the Company’s combined ratio for the twelve months ended December 31, 2013 decreased 5.0 points to 99.8%.

Financial Condition as of December 31, 2013

  • Total assets were $121.282 billion as of December 31, 2013, an increase of $1.222 billion over December 31, 2012.
  • Total equity was $19.012 billion as of December 31, 2013, an increase of $487 million over December 31, 2012.

The complete earnings release is available here: Liberty Mutual Insurance Fourth Quarter and Full Year 2013 Results (PDF)

Source: Liberty Mutual

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