Boston, MA – Liberty Mutual Holding Company Inc. and its subsidiaries recently reported net income attributable to LMHC of $397 million and $596 million for the three and nine months ended September 30, 2020, versus net income attributable to LMHC of $272 million and $1.338 billion for the same periods in 2019, respectively.
“Despite elevated catastrophe losses, net income for the third quarter was $397 million, a 46% increase from the prior year quarter,” said Liberty Mutual Chairman and Chief Executive Officer David H. Long. “Results benefited from strong investment income as valuations in our partnership portfolio, booked on a quarter lag, rebounded from March lows. Catastrophe losses of nearly $1 billion, which doubled from the prior year quarter, were driven by an increased frequency of events across the U.S., including Hurricane Laura and the wildfires on the west coast. We are grateful for the efforts of our claims personnel to support our impacted customers, especially during these challenging times, and for the continued resiliency of all our employees globally during the pandemic.
“Net written premium grew 3.7% to $10.7 billion in the quarter reflecting a 16% increase in renewal rate within Global Risk Solutions and a higher policy count in Global Retail Markets U.S. Personal Lines. Within Global Risk Solutions, the rate increases continued to flow through to the bottom line as evidenced by a 97.1% core combined ratio, which is 1.9 points lower than last year. Going forward, rate increases will continue to be critical as economic conditions pressure returns in our longer tailed business.”
Third Quarter Highlights
Net written premium (“NWP”) for the three months ended September 30, 2020 was $10.710 billion, an increase of $385 million or 3.7% over the same period in 2019.
Pre-tax operating (loss) income before partnerships, limited liability companies (“LLC”) and other equity method income for the three months ended September 30, 2020 was ($158) million, versus $123 million for the same period in 2019.
Partnerships, LLC and other equity method income for the three months ended September 30, 2020 was $467 million, an increase of $305 million or 188.3% over the same period in 2019.
Net realized gains for the three months ended September 30, 2020 were $219 million, an increase of $138 million or 170.4% over the same period in 2019.
Unit linked life insurance for the three months ended September 30, 2020 was ($22) million, a decrease of $10 million or 83.3% from the same period in 2019.
Ironshore Inc. (“Ironshore”) acquisition and integration costs for the three months ended September 30, 2020 were $5 million, an increase of $1 million or 25.0% over the same period in 2019.
Restructuring costs for the three months ended September 30, 2020 were $28 million, an increase of $25 million over the same period in 2019.
Loss on extinguishment of debt for the three months ended September 30, 2020 was zero, no change from the same period in 2019.
Discontinued operations, net of tax, for the three months ended September 30, 2020 were ($6) million, versus zero for the same period in 2019.
Consolidated net income for the three months ended September 30, 2020 was $397 million, an increase of $125 million or 46.0% over the same period in 2019.
Net income attributable to non-controlling interest for the three months ended September 30, 2020 was zero, no change from the same period in 2019.
Net income attributable to LMHC for the three months ended September 30, 2020 was $397 million, an increase of $125 million or 46.0% over the same period in 2019.
Net income attributable to LMHC excluding unrealized impact1 for the three months ended September 30, 2020 was $356 million, an increase of $68 million or 23.6% over the same period in 2019.
Cash flow provided by continuing operations for the three months ended September 30, 2020 was $2.788 billion, an increase of $1.294 billion or 86.6% over the same period in 2019.
The consolidated combined ratio before catastrophes2, COVID-193, net incurred losses attributable to prior years4 and current accident year re-estimation5 for the three months ended September 30, 2020 was 93.6%, a decrease of 1.3 points from the same period in 2019. Including the impact of catastrophes, COVID-19, net incurred losses attributable to prior years and current accident year re-estimation, the total combined ratio6 for the three months ended September 30, 2020 was 104.0%, an increase of 1.5 points over the same period in 2019.
The complete results release is available here: Liberty Mutual Insurance Reports Third Quarter 2020 Results (PDF)
Source: Liberty Mutual