Investment Gains Fuel Liberty Mutual’s Q1 Income Results

Strong investment income gains helped Liberty Mutual more than doubled its first-quarter net income, largely countering more than $1 billion in catastrophe losses.

Still, its consolidated combined ratio took a hit – reaching 101.5 during Q1 2021 compared to 96.3 in the 2020 first quarter.

Liberty Mutual booked $856 million in net income for the 2021 first quarter compared to $519 million over the same period a year ago. That’s a gain of nearly 65 percent. Beyond investment income gains, rate hikes also contributed to Liberty Mutual’s mostly favorable Q1 bottom line.

Liberty Mutual Chairman and CEO David Long said in prepared remarks that the company’s partnership, LLC and equity method investment portfolio produced $838 million in pre-tax operating income due to higher-equity valuations, mostly within private capital investments. That’s up considerably from the previous year.

The company’s $1 billion in catastrophe losses was up $774 million from the same period in 2020, including $690 million alone from February winter storms that hit Texas and other states.

Here are additional Q1 2021 results:

• Consolidated net written premium surpassed $10.4 billion in the quarter compared to $10 billion last year.
• Broken down further, Liberty Mutual’s Global Retail Markets net written premium landed above $6.8 billion compared to $6.5 billion in Q1 2020. Global Risk Solutions net written premium was more than $3.5 billion, essentially flat over the previous year.
• Liberty Mutual said its U.S. Personal Lines unit saw strong premium gains, both in personal auto and homeowners.
• Price increase momentum in personal lines helped produce a 12 percent renewal rate increases within Global Risk Solutions.

Source: Liberty Mutual