Liberty Mutual posts 64% drop in net income

BOSTON—Liberty Mutual Group Inc. reported net income in the first six months of 2011 of $192 million, a 64.1% decrease from $535 million in the same period last year.

During the first half of 2011, revenues grew 4.2% to $16.9 billion and net written premiums increased 5.6% to $15.3 billion, Boston-based Liberty Mutual said in a statement Thursday.

The mutual’s pretax operating income decreased to $185 million in the first six months of this year from $576 million in the first six months of 2010.

The mutual reported a combined ratio in the first six months of this year of 95.7%, which excludes catastrophes and net incurred losses attributable to prior years. The combined ratio decreased 1.5 percentage points from the same period last year, according to the statement.

Among other results, policyholders’ equity as of June 30 increased $791 million over Dec. 31, 2010, to $17.8 billion.

“It was an unprecedented second quarter in terms of severe storm and tornado activity in the U.S., and our operating results reflect the financial cost,” said David H. Long, president and CEO of Liberty Mutual, in the statement.

“Our diversified operating model ensures that we can respond to the needs of all of our policyholders while absorbing the financial impact of such tragic events,” he said.