BOSTON May 06 (BestWire) — Liberty Mutual Group first-quarter net
income fell more than 92%, compared with results from the same time in 2008 due
to losses in private equity income and catastrophes while the company says
it continues to look for rates to match the risk it writes. Net income was
$28 million for the first quarter, compared with $360 million during the
first quarter in 2008.
In a conference call, Edmund F. Kelly, chairman, president and chief
executive officer, said that "fundamentally, our businesses continue to
perform well" and the continued integration of the company's purchase of
Safeco Corp. last year has "progressed well," accounting for much of
Liberty Mutual's growth and profitability especially in the automobile
insurance segment.
Worldwide, auto insurance operations grew 32%, compared with a year ago.
The company now insures 13.2 million vehicles worldwide, growing 54% in
the United States. Without Safeco, that growth was 7%, Kelly said. Liberty
Mutual continues to seek rate increases in auto, of which about 90% of
filings have been approved, Kelly said.
In homeowners, Liberty Mutual was hurt by 11 catastrophes in the West and
Midwest but especially Georgia, Texas and Oklahoma. Here too, Kelly said
Liberty Mutual is "aggressively seeking rate increases" especially in the
Midwestern states where the "industry has been underpricing" the
catastrophe risk in terms of primary insurance and reinsurance.
The insurer recorded about $326 million in catastrophe losses — about $6
million related to hurricanes in September 2008. The figure includes
assessments from the Texas Windstorm Insurance Association. Hurricanes Ike
and Dolly battered Texas in September last year.
Liberty Mutual also took a $373 million loss on private equities. Kelly
said the insurer "felt the negative impact of the capital markets this
quarter through lower values on our private equity portfolio."
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