Liberty Mutual Insurance Reports Second Quarter 2022 Results

Three Months Ended

June 30,

Six Months Ended

June 30,

$ in Millions

2022

2021

Change

2022

2021

Change

Global Retail Markets

$8,865

$7,480

18.5 %

$16,555

$14,325

15.6 %

Global Risk Solutions

3,714

3,377

10.0

7,668

6,937

10.5

Corporate and Other

(58)

(12)

NM   

(135)

(16)

NM   

   Total NWP

$12,521

$10,845

15.5 %

$24,088

$21,246

13.4 %

   Foreign exchange effect on growth

(1.0)

(0.9)

   NWP growth excluding foreign exchange¹

16.5 %

14.3 %

1      Determined by assuming constant foreign exchange rates between periods.

        NM = Not Meaningful

Three Months Ended

June 30,

Six Months Ended

June 30,

$ in Millions

2022

2021

Change

2022

2021

Change

Revenues

$12,215

$11,794

3.6 %

$24,089

$23,609

2.0 %

Underlying PTOI before limited partnerships income

$690

$1,094

(36.9 %)

$1,756

$2,171

(19.1 %)

   Catastrophes

(1,105)

(660)

(67.4)

(1,761)

(1,700)

3.6

   Net incurred losses attributable to prior years:

     – Asbestos and environmental¹

–

–

–

–

–

–

     – All other²

152

14

NM

141

53

166.0

Pre-tax operating (loss) income before limited partnerships income

(263)

448

NM

136

524

(74.0)

Limited partnerships income³

469

954

(50.8)

834

1,792

(53.5)

Pre-tax operating income

206

1,402

(85.3)

970

2,316

(58.1)

Net realized (losses) gains

(671)

(191)

NM

(815)

63

NM

Unit linked life insurance

73

(32)

NM

120

(88)

NM

Acquisition & integration costs

(48)

(5)

NM

(57)

(9)

NM

Restructuring costs

2

(110)

NM

–

(111)

(100.0)

Pre-tax (loss) income

(438)

1,064

NM

218

2,171

(90.0)

Income tax (benefit) expense

(96)

295

NM

62

545

(88.6)

Consolidated net (loss) income

(342)

769

NM

156

1,626

(90.4)

Less: Net income attributable to non-controlling interest

1

–

–

1

1

–

Net (loss) income attributable to LMHC

(343)

769

NM

155

1,625

(90.5)

Net income attributable to LMHC excluding unrealized impact⁴

78

652

(88.0)

587

1,445

(59.4)

Cash flow provided by continuing operations

$1,003

$1,821

(44.9 %)

$1,789

$2,867

(37.6 %)

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 $36 million and $45 million for the three and six
months ended June 30, 2022, and $16 million and $52 million for the same periods in 2021.

3

Limited partnerships income includes LP, LLC and other equity method income within net investment income in the accompanying
Consolidated Statement 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

June 30,

Six Months Ended

June 30,

CONSOLIDATED

2022

2021

Change
(Points)

2022

2021

Change
(Points)

Combined ratio

Claims and claim adjustment expense ratio

68.1 %

62.9 %

5.2

66.1 %

62.5 %

3.6

Underwriting expense ratio

28.7

28.9

(0.2)

28.7

29.2

(0.5)

Underlying combined ratio

96.8

91.8

5.0

94.8

91.7

3.1

Catastrophes

9.5

6.4

3.1

7.8

8.4

(0.6)

Net incurred losses attributable to prior years:

   – Asbestos and environmental

–

–

–

–

–

–

   – All other¹

(1.3)

(0.1)

(1.2)

(0.6)

(0.3)

(0.3)

Total combined ratio²

105.0 %

98.1 %

6.9

102.0 %

99.8 %

2.2

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 

June 30,

As of
December 31,

$ in Millions

2022

2021

Change

Unassigned equity

$29,563

$28,776

2.7 %

Accumulated other comprehensive (loss) income

(6,125)

(960)

Non-controlling interest

30

32

–

    Total equity

$23,468

$27,848

(15.7 %)

NM = Not Meaningful