Liberty Mutual Holding Company’s 2016 fourth quarter net income declined substantially, due mostly to higher U.S. personal and commercial auto liability losses. But the number was up for the full year.

The insurer booked net income of $143 million for Q4, a drop of $268 million from the same period a year ago. Net income reached $1 billion for the year, almost $500 million more than in 2015, results indicated.

Liberty Mutual Insurance Chairman and CEO David Long blamed the quarterly losses on “elevated loss trends within U.S. personal and commercial auto liability.” He noted the doubling of net income for 2016, which occurred “despite higher catastrophe losses and the auto trends,” something he said reflected operations that are generally in good shape.

“Growth remained healthy, with net written premium up 6 percent in the quarter and 3-and-a-half percent for the year,” Long said in prepared remarks.

Liberty Mutual’s combined ratio for the fourth quarter was 97.6, an increase of 1.7 points compared to the 2015 fourth quarter.

Liberty Mutual has long wanted to grow its specialty lines operations, and Long noted the insurer’s Q4 move to acquire Ironshore Inc. from Chinese conglomerate Fosun International Ltd. for about $3 billion. Long said this represents a major accomplishment to cap 2016.

“Ironshore, and their accomplished management team, will bring additional scale, expertise, innovation and market relationships to our existing Global Specialty business, and will solidify our position as a leader in the specialty space,” Long said. The acquisition should close in the 2017 first half, pending regulatory approvals and other closing conditions.

Here are some of Liberty Mutual’s Q4 2016 and full year highlights:

• Net written premium for the fourth quarter surpassed $8.6 billion, a hike of $499 million, or 6.1 percent, over the 2015 fourth quarter.

• Restructuring costs hit $70 million in Q4, but were zero for the same period in 2015.

• For all of 2016, net written premium came in above $35.7 billion, nearly $1.2 billion, or 3.4 percent higher than in 2015.

• Loss on extinguishment of debt in 2016 landed at $76 million, $75 million higher than the previous year.

• Liberty Mutual’s total debt was $7.6 billion as of Dec. 31, 2016, $414 million, or 5.8 percent higher than in Dec. 31, 2015. Total equity was nearly $20.4 billion at the end of 2016, $1.14 billion, or 6 percent higher than at the end of the previous year.

Source: Liberty Mutual