The company reported its combined ratio results slipped somewhat, increasing 0.3 compared to the same period last year, going from 98.8 to 99.1. For the six month comparison, the combined ratio dropped 1.9 points, from 101 to 99.1.

Mr. Kelly noted that unlike the Council of Insurance Agents & Brokers, whose quarterly membership pricing survey found strong price reductions across the board, Liberty Mutual is getting a "better read on pricing" by a couple of points.

Competition is beginning to increase, he noted, but is not affecting rate adequacy in most lines of business. He added that terms and conditions are holding in all markets.

However, he was critical of what he termed "nutty" behavior by some carriers on national accounts where he viewed their pricing as inadequate.

"We view [their underwriting] as a totally crazy thing to do and won't go along with it," he remarked.

When asked his opinion on the chances for renewal of the Terrorism Risk Insurance Act, Mr. Kelly said: "At this stage we are very optimistic that we will see the terrorism reinsurance [act] extended."

He said he did not believe the extension would be long-term, "but our belief is that the industry will have to do some negotiations to get the thing extended in terms of deductibles and what-not. We clearly have [made] a commitment to push as hard as we can to get the bill extended, but we are optimistic we will get TRIA."

Earlier this week, Kevin Bott, a former employee of Liberty Mutual, pleaded guilty to charges in New York of being a part of bid-rigging schemes involving insurance broker Marsh.

In its financial release, the company, while not naming the individual, said a non-executive, non-management employee resigned in June after an investigation, and the employee pleaded guilty to misdemeanor charges in August.

Liberty Mutual said it is the subject of a number of inquiries and civil suits. Mr. Kelly said the firm is cooperating with investigators inquiries into the industry.