Boston, MA – Liberty Mutual Holding Company Inc. and its subsidiaries recently reported net income (loss) attributable to LMHC of $455 million and $863 million for the three and nine months ended September 30, 2016, respectively, versus ($427) million and $103 million for the same periods in 2015. Including $5 million and zero of net loss attributable to non-controlling interest, consolidated net income for the three and nine months ended September 30, 2016 was $450 million and $863 million, respectively.
“We are pleased with our third quarter net income results of $455 million, compared to a loss of $427 million for the same period last year,” said David H. Long, Liberty Mutual Insurance Chairman and CEO. “Each of Liberty Mutual’s strategic business units delivered better than expected growth in the quarter, with net written premium up six percent. Our underlying performance remained strong as our core combined ratio improved about a point in the quarter, despite the continued increase in loss trends within U.S. personal auto liability.”
Third Quarter Highlights
- Net written premium (“NWP”) for the three months ended September 30, 2016 was $9.309 billion, an increase of $534 million or 6.1% over the same period in 2015.
- Pre-tax operating income (“PTOI”) before partnerships, limited liability companies (“LLC”) and other equity method income for the three months ended September 30, 2016 was $417 million, a decrease of $254 million or 37.9% from the same period in 2015.
- Net operating income before partnerships, LLC and other equity method income for the three months ended September 30, 2016 was $357 million, a decrease of $79 million or 18.1% from the same period in 2015.
- Partnerships, LLC and other equity method income for the three months ended September 30, 2016 was $62 million, an increase of $10 million or 19.2% over the same period in 2015.
- Net realized gains (losses) for the three months ended September 30, 2016 were $84 million, versus ($256) million for the same period in 2015.
- Consolidated net income from continuing operations for the three months ended September 30, 2016 was $450 million, an increase of $138 million or 44.2% over the same period in 2015.
- Discontinued operations, net of tax for the three months ended September 30, 2016 were zero compared to ($744) million for the same period in 2015.
- Net income (loss) attributable to LMHC for the three months ended September 30, 2016 was $455 million versus ($427) million for the same period in 2015.
- Cash flow provided by operations for the three months ended September 30, 2016 was $1.270 billion, a decrease of $249 million or 16.4% from the same period in 2015.
- The consolidated combined ratio before catastrophes1, net incurred losses attributable to prior years2 and current accident year re-estimation3 for the three months ended September 30, 2016 was 94.2%, an improvement of 1.2 points over the same period in 2015. 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 September 30, 2016 increased 2.2 points to 97.8%.
Year-to-date Highlights
- NWP for the nine months ended September 30, 2016 was $27.099 billion, an increase of $682 million or 2.6% over the same period in 2015.
- PTOI before partnerships, LLC and other equity method income for the nine months ended September 30, 2016 was $1.204 billion, a decrease of $161 million or 11.8% from the same period in 2015.
- Net operating income before partnerships, LLC and other equity method income for the nine months ended September 30, 2016 was $886 million, a decrease of $64 million or 6.7% from the same period in 2015.
- Partnerships, LLC and other equity method income for the nine months ended September 30, 2016 was $26 million, a decrease of $24 million or 48.0% from the same period in 2015.
- Net realized (losses) gains for the nine months ended September 30, 2016 were ($50) million, versus $22 million for the same period in 2015.
- Consolidated net income from continuing operations for the nine months ended September 30, 2016 was $863 million, a decrease of $135 million or 13.5% from the same period in 2015.
- Discontinued operations, net of tax for the nine months ended September 30, 2016 were zero compared to ($909) million for the same period in 2015.
- Net income attributable to LMHC for the nine months ended September 30, 2016 was $863 million, an increase of $760 million over the same period in 2015.
- Cash flow provided by operations for the nine months ended September 30, 2016 was $1.915 billion, a decrease of $738 million or 27.8% from the same period in 2015.
- The consolidated combined ratio before catastrophes and net incurred losses attributable to prior years for the nine months ended September 30, 2016 was 93.0%, an improvement of 1.7 points over the same period in 2015.
- Including the impact of catastrophes and net incurred losses attributable to prior years, the Company’s combined ratio for the nine months ended September 30, 2016 increased 0.1 points to 98.5%.
Financial Condition as of September 30, 2016
- Total debt was $7.763 billion as of September 30, 2016, an increase of $574 million or 8.0% over December 31, 2015.
- Total equity was $21.694 billion as of September 30, 2016, an increase of $2.453 billion or 12.7% over December 31, 2015.
Subsequent Events
Management has assessed material subsequent events through November 4, 2016, the date the financial statements were available to be issued.
The complete results release is available here: Liberty Mutual Third Quarter 2016 Results (PDF)
Source: Liberty Mutual
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