Liberty Mutual CFO: No IPO Will Take Place

Liberty Mutual Holding Co. Inc., which scuttled plans to take a unit public in 2010, said it has no plans for an initial public offering.

"We don't comment on capital plans, but it is probably pretty safe to assume no," Chief Financial Officer Dennis J. Langwell said when asked about plans for an IPO during the company's fourth-quarter earnings call.

The company was prepared to take its Liberty Mutual Agency Corp. public in 2010 through a $1.17 billion initial public offering, but put the plans on hold citing the stalled economic recovery, volatile stock market and undervalued property/casualty insurance stock prices (Best's News Service, Sept. 29, 2010).

David H. Long, president and chief executive officer of Liberty Mutual Insurance, said the company "actually moved the pieces around this year so what was formerly LMAC no longer exists within the organization."

In 2012 ,the company realigned its strategic business units, organizing them into four new divisions that each focus on a specific line of business: commercial insurance, personal insurance, global specialty and Liberty international (Best's News Service, July 26, 2012).

For the fourth quarter 2012, the company posted a net loss of $234 million, compared with net income of $285 million for the fourth quarter 2011.

The fourth-quarter net loss was principally driven by a $576 million after-tax loss from Hurricane Sandy, which brought about 100,000 claims, twice the amount of Hurricane Katrina, Long said during the conference call. Revenues for 2012 fourth quarter grew 7.4% to $9.628 billion.

The company's combined ratio for the quarter widened to 112.9 from 94.2.

For the full year 2012, the company posted a jump in net income to $829 million from $358 million for 2011. The 2012 results also included a $125 million loss, after tax, from the refinancing of debt and a $64 million after-tax loss associated with the realignment of the operating units.

Most of Liberty Mutual's subsidiaries have current Best's Financial Strength Ratings of A (Excellent).

(By Meg Green, senior associate editor, BestWeek: Meg.Green@ambest.com)