Boston-based Liberty Mutual Group reported third-quarter net income today of $556 million, an increase of $678 million from the same period last year.
The company attributed the sharp upward swing to lower catastrophe costs and continued strong accident-year underwriting and investment results.
Chief Executive Officer Edmund Kelly told a conference call today that despite a competitive market, rates remain attractive.
“We will have zero tolerance for aggressive underwriting,” he promised.
One disturbing trend Mr. Kelly noted was that some large account insurers were offering multiyear rate guarantees for terrorism coverage, despite the uncertainty over passage of a permanent Terrorism Risk Insurance Act.
Liberty Mutual mentioned as highlights for the quarter:
o Revenues increased 11.7 percent to $6 billion.
o Net written premium was $5.159 billion, an increase of 13.5 percent over the same period in 2005.
o An $840 million decrease in catastrophe losses from the same period in 2005, as prior-year results included the impact of Hurricanes Katrina and Rita. Results in the period also included an increase of $69 million in realized capital gains.
o Combined ratio decreased 20.3 points from 2005 to 98 in 2006.
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