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Liberty Mutual records $1.2bn in Q3 cats, underwriting loss widens to $470mn


Liberty Mutual’s third-quarter underwriting loss grew to $470mn, the company has said, as its catastrophe-loss bill rose to $1.2bn from $980mn a year ago.

Net income increased to $721mn, helped by net investment income that was more than 50% higher at $1.4bn, versus $915mn last year.

Net premium written companywide grew 6.5% to $11.4bn, led by growth that topped 11% in Liberty’s global risk solutions (GRS) outfit.

GRS is made up of Liberty’s commercial property, casualty, specialty and reinsurance businesses, including Ironshore. The GRS division wrote $3.8bn in net premiums in the third quarter.

About $823mn of the catastrophes fell on GRS, compared with $595mn for its global retail markets (GRM) business. The GRM division recorded $162mn in adverse reserve development, compared with $1mn in releases for GRS.

Liberty mutual results table nov4 2021 IPC.PNG

Global risk solutions cuts underlying loss ratio 6.5 points

GRS cut its underlying loss ratio to 61.1% in the quarter, from 67.6% last year, while its expense ratio ticked up by 0.2 points to 29.6%.

Catastrophes added 24.4 points to the GRS combined ratio, which spiked to 114.5% from 104.8% last year.

The business retention rate within GRS increased to 81.4% in Q3, ahead of 80.7% in the second quarter, and much improved from 79.3% a year ago.

global risk solutions rate and retention IPC 4 Nov v2.png

That compares with average rate increases of 9.2% in GRS in Q3, versus 12.9% in Q2, and 16.6% in last year’s third quarter.

Rate increases were highest in specialty, which rose by 14.8% but were down from 19.3% in Q2. Casualty rates grew by 13.2%, off from 154.7% in the second quarter, while property rate gains were down to 9.7% from 11.8% in Q2.

global risk solutions rate and retention IPC 4 Nov table.jpg

GRM lowers combined ratio by 3.1 points to 100.8%

Underwriting within GRM improved in the quarter, predominantly as a result of a drop in the segment’s catastrophe loss figure. The $595mn in catastrophe claims was down from $802mn last year.

Overall, the combined ratio for GRM fell by 3.1 points to 100.8%, despite the $162mn (2.2 points) in adverse development. The expense ratio for the division dropped a modest 0.1 points to 28.4%.

NWP in GRM picked up by 5.4% in the quarter to $7.8bn. The division’s underlying loss ratio rose by 2.7 points to 66.4%. Catastrophes added 8.2 points to the segment’s combined ratio, down from 11.6% last year.

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