Liberty Mutual Insurance Reports First Quarter 2023 Results

Three Months Ended

March 31,

$ in Millions

2023

2022

Change

Global Retail Markets

$8,080

$7,690

5.1 %

Global Risk Solutions

3,815

3,954

(3.5)

Corporate and Other

(8)

(77)

(89.6)

   Total NWP

$11,887

$11,567

2.8 %

   Foreign exchange effect on growth

(1.0)

   NWP growth excluding foreign exchange¹

3.8 %

Three Months Ended

March 31,

$ in Millions

2023

2022

Change

Revenues

$12,760

$11,874

7.5 %

Underlying PTOI before limited partnerships income

$1,139

$1,066

7.0

   Catastrophes

(1,027)

(656)

56.6

   Net incurred losses attributable to prior years:

     - Asbestos and environmental¹

-

-

-

     - All other²

(51)

(11)

NM

Pre-tax operating income before limited partnerships income

61

399

(84.7)

Limited partnerships (loss) income³

(84)

365

NM

Pre-tax operating (loss) income

(23)

764

NM

Net realized losses

(16)

(144)

(88.9)

Unit linked life insurance

(30)

47

NM

Acquisition & integration costs

(12)

(9)

33.3

Restructuring costs

(2)

(2)

-

Pre-tax (loss) income

(83)

656

NM

Income tax expense

(16)

158

NM

Consolidated net (loss) income

(67)

498

NM

Less: Net income attributable to non-controlling interest

7

-

-

Net (loss) income attributable to LMHC

(74)

498

NM

Net (loss) income attributable to LMHC excluding unrealized impact⁴

(66)

459

NM

Cash flow provided by continuing operations

$53

$786

(93.3 %)

1

Asbestos and environmental is gross of the related adverse development reinsurance (the "NICO Reinsurance Transaction", which is described further in the Reinsurance section of the accompanying MD&A).

2

Net of earned premium and reinstatement premium attributable to prior years of $7 million for the three months ended March 31, 2023, and $9 million for the same period in 2022.

3

Limited partnerships income includes LP, LLC and other equity method income within net investment income in the accompanying Consolidated Statements of Operations and revenue and expenses from direct investments in natural resources.

4

Excludes unrealized gains on equity securities, unit linked life insurance, and the corresponding tax impact.

NM = Not Meaningful

Three Months Ended

March 31,

CONSOLIDATED

2023

2022

Change

(Points)

Combined ratio

Claims and claim adjustment expense ratio

64.9 %

64.1 %

0.8

Underwriting expense ratio

29.2

28.7

0.5

Underlying combined ratio

94.1

92.8

1.3

Catastrophes

8.6

6.0

2.6

Net incurred losses attributable to prior years:

   - Asbestos and environmental

-

-

-

   - All other¹

0.5

0.1

0.4

Total combined ratio²

103.2 %

98.9 %

4.3

1

Net of earned premium and reinstatement premium attributable to prior years.

2

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.

As of 

March 31,

As of
December 31,

$ in Millions

2023

2022

Change

Unassigned equity

$29,704

$29,822

(0.4 %)

Accumulated other comprehensive loss

(6,662)

(7,830)

(14.9)

Non-controlling interest

223

216

3.2

    Total equity

$23,265

$22,208

4.8 %

Contact:

Investor Relations

Media Relations

Nik Vasilakos

Rich Angevine

857-224-6655

617-833-0926