Liberty Mutual’s Q1’25 net income surpasses $1bn despite significant cat losses

Liberty Mutual Holding Company Inc. (LMHC), a global property and casualty insurer, reported net income attributable to LMHC of $1.025 billion for the first quarter of 2025, down from $1.535 billion in the same period in 2024, as catastrophe losses surged 121% year-on-year.

Given the higher cat load, the company’s underwriting profit declined year-over-year, as reflected in a slightly higher total combined ratio of 96.6% in Q1 2025 compared to 95.8% in Q1 2024.

Catastrophe losses increased to $1.821 billion, more than doubling from $824 million a year earlier. This increase in catastrophe losses added 9.5 points to the combined ratio, contributing to the overall deterioration.

However, the underlying combined ratio improved to 81.9% from 88.4%—suggesting better core underwriting results for the carrier.

Additionally, the company recorded $196 million in favourable development on prior year non-asbestos and environmental losses in Q1 2025, compared to just $6 million in Q1 2024.

Total net written premium (NWP) declined 1.8% year-over-year to $10.76 billion. The US Retail Markets segment saw a 7.4% drop in NWP to $6.06 billion, while Global Risk Solutions posted a 7.5% increase to $4.71 billion. The foreign exchange impact on premium growth was a negative 0.5%, leading to a constant-currency adjusted decline of 1.3%.

Pre-tax operating income before limited partnerships income was $1.086 billion, nearly flat from $1.108 billion in Q1 2024. Limited partnerships income rose sharply to $367 million from $159 million, contributing to an overall increase in pre-tax operating income to $1.453 billion from $1.267 billion.

After accounting for income tax expense of $315 million, Liberty Mutual reported consolidated net income from continuing operations of $1.029 billion, up from $878 million in Q1 2024. However, last year’s total net income included $663 million from discontinued operations, which led to a higher total in the prior-year period.

Total equity increased to $32.36 billion as of March 31, 2025, up from $30.65 billion at year-end 2024. However, cash flow from continuing operations declined significantly to $439 million from $901 million a year earlier.

“For the first quarter, we reported net income attributable to LMHC of $1.0 billion, reflecting improvement in our underlying combined ratio and strong investment results,” added Tim Sweeney, Liberty Mutual Chairman & Chief Executive Officer.

“Continued discipline in our underwriting resulted in a notable 6.5-point improvement in the underlying combined ratio, achieving an 81.9% for the first quarter. Despite elevated catastrophe losses, driven by the devastating California wildfires, our total combined ratio including these losses and prior year development was 96.6%.

“Furthermore, our investment results in the quarter were excellent, benefiting from higher reinvestment rates and favourable private equity valuations, contributing $1.3 billion of investment income. Overall, we are very pleased with our performance this quarter as we continue to pursue profitable growth and progress toward our 95% combined ratio goal at the end of 2025.”

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Liberty Mutual Holding Company Inc. (LMHC), a global property and casualty insurer, reported net income attributable to LMHC of $1.025 billion for the first quarter of 2025, down from $1.535 billion in the same period in 2024, as catastrophe losses surged 121% year-on-year. Given the higher cat load, the company’s underwriting profit declined year-over-year, as…