NU Online News Service, Feb. 17, 2:19 p.m.EST

LibertyMutual Group is in no rush to enter the equity markets as it hadplanned last year, according to its chief executive officer.

“I think insurance stocks stink,” said Edmund “Ted” Kelly,chairman and CEO of Liberty Mutual, during a conference call.

Liberty Mutual Agency Corp. expected to raise $1.2 billion with an initialpublic offering but backed off due to market conditions. Thecommercial market continues to drive down share prices of insurancecompanies.

“Until there is some common sense in commercial pricing, wedon't think insurance stocks will be fairly valued,” Mr. Kellysaid.

Consistent with his criticism of the market's pricing ofcommercial insurance—once calling it “patent nonsense”—Mr. Kellysaid any optimism he has in the industry conveying positive signsin exposure is “tempered by competitors' pricing behavior.”

He said, “If you sell more exposure at bad rates, you just losemoney. Liberty Mutual is “much more concerned about price levels,”he added.

Customers are asking for policies to last longer than thetypical one year, which may mean “they expect rates to begin movingupwards,” Mr. Kelly said.

Liberty Mutual would go back to the stock offering if it wasappropriate, but that is “highly unlikely” in the near term, Mr.Kelly said.

The mutual reported net income of $576 million for the 2010fourth quarter and $1.68 billion for the year. Results areincreases of 21.8 percent and 64 percent, respectively, comparedwith the same periods the prior year.

Compensating for the difficulties in the commercial market,Liberty Mutual's international operations and U.S. personal linesbusinesses picked up the slack.

International net written premiums increased 2.3 percentin 2010 compared to 2009. Total net written premiums for the fourthquarter and full-year increased 5.3 percent and 6.8 percent,respectively.

Mr. Kelly said the “most significant area of growth” will be ininternational operations. Late last year he said any company withoperations solely in North America would become irrelevant.