NU Online News Service, Sept. 29, 1:10 p.m. EDT
Liberty Mutual Group said it is delaying its initial public offering of stock in Liberty Mutual Agency Corporation (LMAC) because the company believes it won't get the right price for the business.
Liberty Mutual had hoped to sell 64.3 million shares for between $18 and $20 per share under the NASDAQ symbol LMAC in order to raise about $1.2 billion.
Citing what it called a "stalled economic recovery," an unpredictable market and undervalued stock prices in the property and casualty industry, Liberty Mutual Group called off the offering without saying when it might offer the stock again.
"The delay will not impact our business or our day-to-day operations," said Edmund F. Kelly, Liberty Mutual Group chairman and chief executive officer, in a statement. "We have more than adequate capital to conduct our business successfully."
Liberty Mutual could not be immediately reached for additional comment.
LMAC consists of all of the operations conducted by Liberty Mutual's Agency Markets unit, comprised of property and casualty and specialty insurance carriers that distribute products and services through independent agents and brokers.
Based on direct written premiums, Liberty Mutual Group is the fifth-largest p&c insurer in the United States, bolstered by the recent acquisitions of Safeco Corp. in 2008 and Ohio Casualty in 2007.
From 2005-2009, Liberty Mutual Group did not record a combined ratio under 100, according to figures from Highline Data, part of Summit Business Media, which publishes National Underwriter. The combined ratio was about 103.3 at the end of 2009.
During the same span Liberty Mutual Group recorded losses in underwriting income, with a loss of nearly $659 million in 2009, according to Highline Data.
Net income for the group in 2009 was about $915.9 million, compared with about $2.4 billion in 2008.
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