Premiums and Profit Up in Third Quarter for Liberty Mutual

Liberty Mutual’s third-quarter profit grew by 3.4 percent compared to last year, with part of that growth due to better performance in its personal auto sector, the insurer reported Wednesday in its quarterly financial report.

The 3.4 percent boost in net income translated to a growth of $16 million between the two quarters. Total revenues for Liberty Mutual this past quarter increased by 8 percent compared to the same quarter last year.

Premiums for the quarter also increased by nearly the same amount, jumping $707 million, or 8.2 percent, compared to the year-before period.

However, investment profit in the third quarter this year fell 7.3 percent compared to last year for a loss of $55 million.

Year-to-date, Liberty Mutual’s personal auto insurance coverage line has made up 35 percent of its total premiums, according to a company presentation that accompanied the financial release, representing the largest line of business for the insurer, followed by homeowners at 13 percent.

For 2013 so far, personal auto has made up an even larger chunk of premiums for personal lines, at 59 percent. Homeowners made up 38 percent of premiums, followed by personal life insurance at 3 percent.

David Long, chairman and CEO of Liberty Mutual, said that “severe storm activity was milder than the prior year.”

Losses from disasters amounted to $153 million this quarter compared to $279 million in the same quarter last year, an 82 percent drop.

Net Written Premiums Up, Retention Down

The car insurer reported a nearly 7 percent growth in active auto policies for the quarter compared to last quarter.

Liberty Mutual’s retention of personal car insurance policyholders has held relatively steady, dropping by a little over half of a percentage point between the third quarter of 2012 and this quarter, from 83.5 percent to 82.9 percent.

To compare, retention of homeowners policyholders dropped 1.3 percentage points in that period.

Year-over-year, premiums for Liberty Mutual’s personal auto lines grew 11 percent, but it was the smallest amount of growth of the insurer’s personal lines; homeowners increased by 13 percent and life by 34 percent.

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About Ben Zitney
Benjamin Zitney has been covering the auto insurance industry for the past 2.5 years. Before coming to Online Auto Insurance News, he produced an extensive company history of the 30-year-old California Joint Powers Insurance Authority and worked at the Cal State Long Beach Daily Forty-Niner as a reporter, copy editor and news editor.

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