Boston, MA – Liberty Mutual Holding Company Inc. and its subsidiaries recently reported net income of $448 million and $766 million for the three and six months ended June 30, 2013, increases of $309 million and $168 million over the same periods in 2012.
“Underwriting results continue to improve through the first six months, as evidenced by a decrease of 3.5 points in combined ratio to 99.9%,” said David H. Long, Liberty Mutual Insurance Chairman and CEO. “The improvement highlights our commitment to disciplined underwriting and profitable growth, a strategy that we intend to continue.
“For the quarter, net income year over year increased by $309 million to $448 million, while net written premium grew almost 7%.”
Second Quarter Highlights
- Revenues for the three months ended June 30, 2013 were $9.824 billion, an increase of $667 million or 7.3% over the same period in 2012.
- Net written premium (“NWP”) for the three months ended June 30, 2013 was $8.893 billion, an increase of $558 million or 6.7% over the same period in 2012.
- Pre-tax operating income (“PTOI”) before LP and LLC income for the three months ended June 30, 2013 was $374 million, an increase of $326 million over the same period in 2012.
- PTOI for the three months ended June 30, 2013 was $594 million, an increase of $455 million over the same period in 2012.
- Loss on extinguishment of debt for the three months ended June 30, 2013 was $39 million, a decrease of $109 million or 73.6% from the same period in 2012. Sixty-six million dollars of debt with a 10.75% coupon was repurchased in the quarter, and $600 million of senior debt was issued with a coupon of 4.25%. Twenty-five million dollars of 7.860% Medium Term Notes matured on May 31, 2013.
- Net income attributable to LMHC for the three months ended June 30, 2013 was $448 million, an increase of $309 million over the same period in 2012.
- Cash flow from operations for the three months ended June 30, 2013 was $1.156 billion, an increase of $582 million or 101.4% over the same period in 2012.
- The consolidated combined ratio before catastrophes, net incurred losses attributable to prior years and current accident year re-estimation for the three months ended June 30, 2013 was 94.8%, a decrease of 2.7 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 June 30, 2013 decreased 4.3 points to 101.5%.
Year-to-Date Highlights
- Revenues for the six months ended June 30, 2013 were $18.969 billion, an increase of $931 million or 5.2% over the same period in 2012.
- NWP for the six months ended June 30, 2013 was $17.486 billion, an increase of $1.073 billion or 6.5% over the same period in 2012.
- PTOI before LP and LLC income for the six months ended June 30, 2013 was $982 million, an increase of $478 million or 94.8 % over the same period in 2012.
- PTOI for the six months ended June 30, 2013 was $1.250 billion, an increase of $534 million or 74.6% over the same period in 2012.
- Loss on extinguishment of debt for the six months ended June 30, 2013 was $60 million, a decrease of $103 million or 63.2% from the same period in 2012. One hundred and four million dollars of debt with a 10.75% coupon was repurchased year-to-date, and $600 million of senior debt was issued with a coupon of 4.25%. Twenty-five million dollars of 7.860% Medium Term Notes matured on May 31, 2013.
- Net income attributable to LMHC for the six months ended June 30, 2013 was $766 million, an increase of $168 million or 28.1% over the same period in 2012.
- Cash flow from operations for the six months ended June 30, 2013 was $1.571 billion, an increase of $346 million or 28.2% over the same period in 2012.
- The consolidated combined ratio before catastrophes and net incurred losses attributable to prior years for the six months ended June 30, 2013 was 95.1%, a decrease of 1.7 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 six months ended June 30, 2013 decreased 3.5 points to 99.9%.
Financial Condition as of June 30, 2013
- Total assets were $121.248 billion as of June 30, 2013, an increase of $1.188 billion over December 31, 2012.
- Total equity was $17.825 billion as of June 30, 2013, a decrease of $700 million from December 31, 2012.
The complete earnings release is available here: Liberty Mutual Second Quarter 2013 Results (PDF)
Source: Liberty Mutual