Liberty Mutual Holding Co. reported a net loss of $320 million for the second quarter versus net income of $397 million for the same quarter last year.
The loss reflected the impact of COVID-19, catastrophes and the economic downturn, according to the Boston-based company.
Incurred losses for COVID-19 amounted to $529 million in the quarter, with roughly half of these losses related to event cancellations. The company said this amount was within its expectations for an event of the magnitude of the coronavirus pandemic.
Catastrophe losses of $878 million were up $384 million from the prior year quarter and resulted primarily from a high frequency of severe storm activity and included $147 million of losses related to civil unrest.
On the investment side, realized gains from the sale of fixed maturities were more than offset by losses in its partnership portfolio.
Despite these events, the combined ratio in the quarter improved 4.6 points to 89.1, noted David H. Long, chairman and chief executive officer. The insurer is encouraged by the “continued market firming” in commercial lines, which he said is likely to accelerate as COVID-19 weighs on industry profitability.
“The market has been receptive to the need for rate in recent quarters as loss trends remain elevated,” Long said. “We expect this will have a meaningful impact on our core underwriting results going forward.”
Consolidated revenue for the quarter was $10.1 billion, down 5.7%
Net written premium for the three months was $9.780 billion, a decrease of $259 million or 2.6% from the same period in 2019.
The pre-tax operating loss income for the three months was $327 million, versus $208 million for the same period in 2019.
Source: Liberty Mutual
*This story ran previously in our sister publication Insurance Journal.