Liberty Mutual rebounds with $717 million Q2 profit

Liberty Mutual reported a net income of $717 million for Q2’24, a significant turnaround from a $585 million loss in the same period last year.

The improved performance was driven by a 9.5-point reduction in the underlying combined ratio to 84%, thanks to targeted underwriting strategies and effective expense management. The total combined ratio, including catastrophe losses, improved to 99.6%, reflecting a 9.8-point enhancement year-over-year.

CEO Tim Sweeney highlighted strong investment results, with net investment income reaching $1.3 billion, benefiting from higher reinvestment rates and favorable private equity valuations. Despite elevated catastrophe losses, primarily due to severe convective storms in the U.S. Midwest, the company saw a robust financial recovery.

Net written premiums declined slightly by 3.3% to $11.4 billion for the quarter, with US Retail Markets seeing a 5% drop. Liberty Mutual continues to execute its strategic plans, including the recent agreement to sell Hughes Insurance in Northern Ireland to Markerstudy Group, expected to close in the second half of 2024.

Despite some improvement, the company still faced elevated catastrophe losses totaling $1.7 billion, driven mainly by severe convective storms in the U.S. Midwest. The company highlighted continued pressure from legal system abuse, which is contributing to increased severity and lengthening of the claims settlement process, particularly in casualty lines. “Climate change, legal system abuse, and geopolitical risks continue to make our operating environment incredibly complex and unpredictable,” said Neeti Bhalla Johnson, Executive VP, President of Global Risk Solutions, and Director.