Liberty Mutual Holding Company Inc. and its subsidiaries (collectively, LMHC) has become the latest insurance company to report its financial results for Q1 2021, and the group has posted a net income of US$856 million (approx. AU$1.11 billion), an increase of 64.9% or US$337 million over the same period in 2020.
Commenting on the increase, Liberty Mutual chairman and CEO David H. Long noted it is a result of strong investment results more than offsetting elevated catastrophe losses. Net written premium across LMHC increased 3.6% to US$10.4 billion, driven by US personal lines where the group continues to achieve strong PIF growth, over 7% in both personal auto and homeowners.
Revenue for the group in Q1 2021 stands at around US$11.82 billion, up 13% from the same period in 2020, while its COVID-related losses reside at US$36 million for the quarter.
Meanwhile, sustained pricing momentum in commercial lines resulted in a 12% renewal rate increase within Global Risk Solutions, while expense management combined with strong premium growth drove a one point reduction in the expense ratio to 29.5%. Long highlighted that the group’s partnership, LLC and other equity method investment portfolio produced US$838 million in pre-tax operating income. This was due to higher equity valuations, primarily within private capital investments.
“Catastrophe losses in the quarter were US$1 billion, up US$734 million from the prior-year quarter including US$690 million from the February winter storms, which impacted Texas and other states,” he said. “Overall, it was a strong quarter despite an elevated level of catastrophe losses, and we are pleased with the progress we’re making toward key business objectives.”