Liberty Mutual has announced its third quarter (Q3) 2021 financial results, reporting net income for the quarter of $721 million, up 81.6% from the prior year, despite an elevated level of catastrophe losses. For the nine months ended September 30, 2021, the group’s net income was $2.346 billion, an increase of $1.750 billion over the same period last year.
Broken down by business, Liberty Mutual’s Global Retail Markets reported net written premium (NWP) of $7.76 billion, up 5.4% from the $7.36 billion reported in the same period of 2020, and Global Risk Solutions announced Q3 NWP of $3.8 billion, up 11.3% from the $3.4 billion in Q3 2020. Meanwhile, Corporate and other businesses saw an approximate 100% decline in NWP in Q3 2021, compared to the prior year period.
Total NWP for the group in the third quarter was $11.4 billion, up 6.5% from the $10.7 billion reported in the same quarter of 2020. For the nine months ended September 30, 2021, Liberty Mutual secured NWP of $32.7 billion, an increase of 7% from the $30.5 billion reported in the first three quarters of 2020.
“Topline growth was strong across both of our businesses as net written premium increased 6.5%,” said David H. Long, Liberty Mutual chairman and chief executive officer. Global Retail Markets premium in the quarter grew 5.4% over the same period in 2020, driven by US personal lines where personal auto and homeowners policies in force increased 5.9% and 6.5%, respectively.
“Global Risk Solutions premium grew 11.3% driven by a combination of rate increases and exposure growth. Core underwriting results in this segment continued to improve, with a 6.5 point decrease in the core loss ratio to 61.1% for the third quarter driven by rate execution, improved risk selection, and lower large loss activity.”
Liberty Mutual did suffer an elevated level of catastrophe losses in the third quarter, reporting a $1.2 billion loss – an increase of 23.9% from the $980 million loss in the same period last year - with losses stemming from Hurricane Ida totaling $812 million. For the nine months ended September 30, 2021, the group took CAT losses of $2.9 billion, up 34.7% from $2.2 billion in the prior year period.
However, the insurer offset some of these losses with continued strong investment performance. Long commented: “We continue to experience extraordinary returns in our partnerships, LLC and other equity method investment portfolio which generated $1.0 billion of pre-tax net investment income, up from $467 million, primarily driven by private capital investments.”