The Boston-based mutual insurer had raised rates across a broad range of its offerings?including workers' compensation, liability and commercial auto policies?which led to improved profitability even as the company took a $331 million reserve charge for asbestos claims last year. The charge followed the company?s comprehensive ground-up analysis of asbestos reserves and also included an allowance for uncollectible reinsurance of $158 million.

The insurer's property-casualty combined ratio for 2003 was 104.4, down from 106.3 reported in 2002.

"I am very pleased with our overall operating performance in 2003," said Edmund Kelly, Liberty Mutual Group's chairman, president and chief executive officer. "The underwriting and balance sheet actions we have taken over the last several years provide us with a solid foundation for future profitable growth."

Mr. Kelly said underwriting results continued to improve in strategic business units, largely benefiting from "the significant pricing actions taken over the last several years."

Liberty Mutual is one of the largest workers' comp insurers in the United States. The company also offers homeowners and auto insurance, as well as retirement products. Other services include risk-prevention services that analyze work sites and practices for safety, consulting, and physical rehabilitation centers.