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Liberty Mutual Q2 profit rises as catastrophe losses fall
Cat losses fell 43.7% in Q2 to $455 million, helping lift the consolidated combined ratio to 86.4%.
Liberty Mutual reported second-quarter net income rose 42.8% to $2.634 billion, helped by a quieter catastrophe season rather than improving underlying loss costs, according to Insurance Business. CAT losses declined 43.7% in Q2 to $455 million, with catastrophe losses contributing 4.2 combined ratio points, down from 7.3 points a year earlier.
The consolidated combined ratio improved to 86.4% in Q2 from 87.2% a year earlier, and to 87.3% year to date from 91.9%. However, the underlying combined ratio, which excludes catastrophe losses and prior-year reserve development, widened 2.4 points to 84.5% in Q2 from 84.1% in the first quarter, signaling modest pressure on core loss costs.
Global Risk Solutions net written premium increased 3.5% in Q2 to $4.439 billion, but retention fell to 85.5% from 89.8% in Q1 and new business premium declined to $894 million from $1.06 billion. By contrast, the US Retail Markets segment posted a combined ratio of 82.3%, improving 2.9 points on lower catastrophe losses, while its NWP contracted 4.1% to $6.627 billion.
Liberty Mutual also said total consolidated revenues rose 6% in Q2 to $13.251 billion, with pre-tax operating income up 29.8% to $3.259 billion, though the insurer noted much of the earnings improvement came from limited partnership income. LP income more than doubled in Q2 to $850 million, versus $410 million a year earlier, while underlying pre-tax operating income before LP income fell 2% year over year.