NU Online News Service, Oct. 27, 3:43 p.m. EDT
Liberty Mutual's third-quarter net income jumped to $265 million from $6 million for the period last year thanks to improvements in investment income and a benign hurricane season, the company's chief executive said.
Edmund F. Kelly, the company's chairman, president and chief executive officer, said during a conference call that in addition to the investment improvements and the benign hurricane catastrophe season the company's acquisition of Safeco is proving a better performer than expected–a pleasant surprise, he noted, saying the company is a "big reason for our strong performance."
"We are pleased with our results in the quarter," said Mr. Kelly in a statement. "We and the industry benefited in the quarter from improved asset values and favorable weather. We remain committed to disciplined underwriting, reserving and overall risk management to maintain our strong balance sheet."
Third-quarter revenues increased 15 percent, or $1.05 billion, to $7.9 billion. The Boston-based company's combined ratio declined 2.8 points to 100.6.
For the first nine months of this year, Liberty Mutual reported net income dropped $99 million to $567 million, but revenues increased 12 percent, or $2.45 billion, to $23.2 billion. The combined ratio declined 1.9 points to 100.1.
Making some observations about the markets, Mr. Kelly said there is "irrationality" surrounding commercial lines accounts, and while Liberty is maintaining underwriting discipline, competitors are coming in with unsustainable rates in order to capture market volume,.
While the company is not exiting the workers' compensation market in both California and Florida, Mr. Kelly noted significant concern with pricing and reforms in both states. The company's underwriting in those states reflects the carrier's concerns. He was particularly critical of Florida, where, he said, state actions are doing to workers' comp what they have to the troubled Florida property insurance market.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.