Liberty Mutual Insurance Reports Fourth Quarter and Full Year 2024 Results
Πέμπτη, 06 Μαρτίου 2025 13:20Liberty Mutual Holding Company Inc. and its subsidiaries (collectively "LMHC" or the "Company") reported net income attributable to LMHC of $1.239 billion and $4.383 billion for the three and twelve months ended December 31, 2024, versus income of $654 million and $213 million for the same periods in 2023.
"I'd like to first acknowledge the devastating wildfires that have impacted so many California communities. Our claims professionals are on the ground working tirelessly to support our policyholders during this challenging time," said Tim Sweeney, Liberty Mutual President & Chief Executive Officer. "Our extremely strong financial position enables us to effectively respond to these events and provide the reassurance and resources our customers need to recover. Turning to our 2024 financial performance, I am pleased to report that we achieved net income attributable to Liberty Mutual Holding Company of $1.2 billion in the fourth quarter. Our disciplined underwriting and operational execution have driven significant improvements, resulting in a combined ratio of 91.5% for the quarter, our lowest in 20 years. We are making remarkable progress toward our goal of achieving a 95% combined ratio in 2025, driven by underwriting and expense discipline in both US Retail Markets and Global Risk Solutions. This progress sets a solid foundation for future success, and we are committed to maintaining this discipline as we now seek to grow in select segments. We are now in a position to pursue profitable growth in the areas where we have achieved target profitability."
The tables below outline highlights of LMHC's consolidated financial results for the three and twelve months ended December 31, 2024.
Net Written Premium ("NWP") by Business:
Consolidated NWP by business was as follows:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||
| $ in Millions | 2024 | 2023 | Change | 2024 | 2023 | Change |
| US Retail Markets | $6,700 | $7,069 | (5.2 %) | $28,279 | $29,859 | (5.3 %) |
| Global Risk Solutions | 3,844 | 4,294 | (10.5) | 16,416 | 16,800 | (2.3) |
| Corporate and Other | 7 | (33) | NM | 268 | (177) | NM |
| Total NWP | $10,551 | $11,330 | (6.9 %) | $44,963 | $46,482 | (3.3 %) |
| Foreign exchange effect on growth | 0.5 | 0.1 | ||||
| NWP growth excluding foreign exchange1 | (7.4 %) | (3.4 %) | ||||
| 1 | Determined by assuming constant foreign exchange rates between periods. |
| NM = Not Meaningful |
Consolidated Results of Operations:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||
| $ in Millions | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Revenues | $12,218 | $12,567 | (2.8 %) | $50,218 | $49,412 | 1.6 % |
| Underlying PTOI before limited partnerships income | 2,949 | 1,553 | 89.9 | 9,406 | 4,895 | 92.2 |
| Catastrophes | (234) | (233) | 0.4 | (3,890) | (4,684) | (17.0) |
| Net incurred losses attributable to prior years: | ||||||
| - Asbestos and environmental1 | (175) | (110) | 59.1 | (175) | (110) | 59.1 |
| - All other2 | (760) | (40) | NM | (683) | 521 | NM |
| Current accident year re-estimation3 | (20) | (60) | (66.7) | - | - | - |
| Pre-tax operating income before limited partnerships income | 1,760 | 1,110 | 58.6 | 4,658 | 622 | NM |
| Limited partnerships income4 | 380 | 4 | NM | 1,266 | 89 | NM |
| Pre-tax operating income | 2,140 | 1,114 | 92.1 | 5,924 | 711 | NM |
| Net realized losses | (623) | (271) | 129.9 | (1,041) | (296) | NM |
| Acquisition & integration costs | (25) | (32) | (21.9) | (87) | (90) | (3.3) |
| Restructuring costs | (4) | (55) | (92.7) | (59) | (121) | (51.2) |
| Pre-tax income | 1,488 | 756 | 96.8 | 4,737 | 204 | NM |
| Income tax expense | 280 | 102 | 174.5 | 1,060 | 35 | NM |
| Consolidated net income from continuing operations | 1,208 | 654 | 84.7 | 3,677 | 169 | NM |
| Discontinued operations, net of tax | 34 | 9 | NM | 725 | 59 | NM |
| Consolidated net income | 1,242 | 663 | 87.3 | 4,402 | 228 | NM |
| Less: Net income attributable to non-controlling interest | 3 | 9 | (66.7) | 19 | 15 | 26.7 |
| Net income attributable to LMHC | 1,239 | 654 | 89.4 | 4,383 | 213 | NM |
| Net income attributable to LMHC excluding unrealized impact5 | 1,126 | 697 | 61.5 | 4,249 | 143 | NM |
| Cash flow provided by continuing operations | $1,567 | $1,328 | 18.0 % | $6,469 | $3,550 | 82.2 % |
| 1 | Asbestos and environmental is gross of the related adverse development reinsurance (the "NICO Reinsurance Transaction", which is described further in Reinsurance). |
| 2 | Net of earned premium and reinstatement premium attributable to prior years of $46 million and $123 million for the three and twelve months ended December 31, 2024, and $300 million and $340 million for the same periods in 2023. |
| 3 | Re-estimation of the current accident year loss reserves for the nine months ended September 30, 2024 and September 30,2023. |
| 4 | Limited partnerships income includes LP, LLC and other equity method income within net investment income in the accompanying Consolidated Statements of Income and revenue and expenses from direct investments in natural resources. |
| 5 | Excludes unrealized gains on equity securities and the corresponding tax impact. |
| NM = Not Meaningful |
Combined Ratio:
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||
| CONSOLIDATED | 2024 | 2023 | Change | 2024 | 2023 | Change |
| Combined ratio | ||||||
| Claims and claim adjustment expense ratio | 52.5 % | 62.4 % | (9.9) | 57.9 % | 65.3 % | (7.4) |
| Underwriting expense ratio | 28.7 | 28.7 | - | 27.6 | 28.1 | (0.5) |
| Underlying combined ratio | 81.2 | 91.1 | (9.9) | 85.5 | 93.4 | (7.9) |
| Catastrophes | 2.1 | 2.0 | 0.1 | 8.6 | 10.3 | (1.7) |
| Net incurred losses attributable to prior years: | ||||||
| - Asbestos and environmental | 1.6 | 0.9 | 0.7 | 0.4 | 0.2 | 0.2 |
| - All other1 | 6.8 | 0.6 | 6.2 | 1.4 | (1.2) | 2.6 |
| Current accident year re-estimation2 | (0.2) | 0.5 | (0.7) | - | - | - |
| Total combined ratio3 | 91.5 % | 95.1 % | (3.6) | 95.9 % | 102.7 % | (6.8) |
| 1 | Net of earned premium and reinstatement premium attributable to prior years. |
| 2 | Re-estimation of the current accident year loss reserves for the nine months ended September 30, 2024 and September 30, 2023. |
| 3 | The combined ratio, expressed as a percentage, is a measure of underwriting profitability. This measure should only be used in conjunction with, and not in lieu of, underwriting income and may not be comparable to other performance measures used by the Company's competitors. The combined ratio is computed as the sum of the following property and casualty ratios: the ratio of claims and claim adjustment expense less managed care income to earned premium; the ratio of insurance operating costs plus amortization of deferred policy acquisition costs less third-party administration income and fee income (primarily related to the Company's involuntary market servicing carrier operations) and installment charges to earned premium; and the ratio of policyholder dividends to earned premium. Provisions for uncollectible premium and reinsurance are not included in the combined ratio unless related to an asbestos and environmental commutation and certain other run off. Restructuring and acquisition and integration costs are not included in the combined ratio. |
Equity:
| As of December 31, | As of | ||
| $ in Millions | 2024 | 2023 | Change |
| Unassigned equity | $34,374 | $29,991 | 14.6 % |
| Accumulated other comprehensive loss | (3,928) | (5,127) | (23.4) |
| Non-controlling interest | 206 | 196 | 5.1 |
| Total equity | $30,652 | $25,060 | 22.3 % |
Subsequent Events
On March 2, 2025, the Company announced the agreement to sell its operations in Thailand and Vietnam to Chubb Limited. The Thailand transaction is expected to close by the second quarter of 2025 and the Vietnam transaction is expected to close in 2026, subject to certain closing conditions and regulatory approvals.
There were a series of severe wildfires that impacted areas of Southern California in January 2025. The Company's preliminary pre-tax estimate of catastrophe losses relating to these California wildfires is $1.2 billion. The preliminary amount includes estimated assessments from the California FAIR Plan and reinsurance recoveries net of reinstatement premium. These values do not consider any subrogation. The catastrophe losses will be recorded in the Company's Q1 2025 financial statements.
Management has assessed material subsequent events through March 5, 2025, the date the financial statements were available to be issued.
Financial Information
The Company's financial results, management's discussion and analysis of operating results and financial condition, accompanying financial statements and other supplemental financial information for the three and twelve months ended December 31, 2024 are available on the Company's Investor Relations website at www.libertymutualgroup.com/investors.
Conference Call Information
On March 6, 2025, at 10:00 a.m. Eastern Time, Tim Sweeney, Liberty Mutual Insurance President and CEO, will host a conference call to discuss the Company's fourth quarter financial results. To participate in the event via telephone and to ask a question, please dial 844-481-2837 and request to join into the Liberty Mutual Insurance call. To listen to the call online via PC and view a presentation on financial performance, please log into https://event.choruscall.com/mediaframe/webcast.html?webcastid=imANTA4n. Following the call, a recording of the event will be available on the Investor Relations section of Liberty Mutual's website, www.libertymutualgroup.com/investors.
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