Catastrophes hand Liberty Mutual a quarterly lossReprints
A trio of hurricanes caused Liberty Mutual Holding Co. Inc. to report a 2017 third-quarter loss of $655 million on Friday, compared with net income of $455 million a year ago.
President and CEO David Long said the quarter’s losses was driven by the after-tax impact of hurricanes Harvey, Irma and Maria, which totaled $1.2 billion. The combined ratio was 92.5%, an improvement over 94.2% in the year-ago quarter, which Mr. Long said indicated that “the business fundamentals remain healthy.”
During a conference call with investors, Mr. Long said that the three storms delivered about $500 million in assumed reinsurance losses.
“I would note that our reinsurance business has been very profitable historically,” he said, “and this result reflects the very reason why our partners buy from us. These events happen, and we’ll be there when they do.”
Net written premium for the quarter was $10.38 billion, up 11.5% over the same period in 2016.
The acquisition and integration costs associated with Hamilton, Bermuda-based specialty insurer Ironshore Inc. for the quarter were $28 million, compared with no such costs a year ago, according to the earnings report. Liberty Mutual had announced in December 2016 that it was buying Ironshore from Chinese conglomerate Fosun International Ltd. for $2.93 billion.
“All in all, a challenging quarter financially,” Mr. Long said, “but also rewarding as we helped many of our customers recover these events.”
For the first nine months of the year, Liberty Mutual posted a loss of $188 million compared with net income of $863 million in the same period a year ago. Net written premiums for the period totaled $29.52 billion, up 8% from the year-ago period.