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BOSTON—Liberty Mutual Group Inc.'s net income for the first nine months of the year dropped 92.6% to $81 million compared with the same period a year earlier, reflecting weather-related losses and an increase in asbestos-related reserves, the Boston-based insurer reported Friday.
Revenues for the first nine months of the year increased 4.3% to $25.71 billion from the same period in 2010, and net written premiums increased 5.6% to $23.46 billion.
Liberty Mutual sustained a pretax operating loss of $18 million compared with $1.23 billion of pretax operating income for the comparable period a year earlier.
The insurer's consolidated combined ratio for the period before catastrophes and net incurred losses attributable to prior years was 96.7%, a slight improvement from the previous year. But with catastrophes and net incurred losses attributable to prior years included, the combined ratio deteriorated 6.6 points to 108.6%.
For the third quarter, Liberty Mutual sustained a net loss of $111 million compared with $567 million in net income during the same period a year earlier.
Revenues for the third quarter increased 4.5% to $8.77 billion, and net written premiums increased 5.6% to $8.155 billion. But the insurer sustained a pretax operating loss of $203 million compared with pretax operating income of $658 million during the same period a year earlier.
The consolidated combined ratio for the quarter—before catastrophes and net incurred losses attributable to prior years—was unchanged at 97.9%. But with catastrophes and net incurred losses attributable to prior years included, the combined ratio deteriorated 11.4 points to 110.5%.
“Severe weather and an increase in our asbestos-related reserves overshadowed strong and improving core performance and resulted in a loss for the quarter,” said David H. Long, president and CEO of Liberty Mutual, in a statement accompanying the earnings report. “Our domestic personal lines operations grew at a faster rate than the industry with solid core profitability; our international companies grew at a double-digit rate with improved profitability; and our domestic commercial lines businesses achieved price increases higher than the prior quarter. We remain committed to disciplined underwriting and will shed business where we cannot write a risk at an adequate return.”