Liberty Mutual Holding Company Inc. reported a significant drop in its first-quarter earnings for 2025, posting a net income of around $1 billion. This marks a decline of about 33% compared to the same period last year. The company faced substantial catastrophe losses during the first three months of the year, primarily due to wildfires in California. These losses amounted to $1.8 billion, a sharp increase from $824 million in the previous year. The impact of these losses added 16.7 points to the company’s combined ratio, which stood at 96.6 for the quarter. In comparison, Liberty Mutual had a better performance in the first quarter of 2024, with a combined ratio of 95.8.
Despite these challenges, CEO Tim Sweeney highlighted some positive aspects of the company’s performance. He noted that Liberty Mutual improved its underlying combined ratio by 6.5 points, bringing it down to 81.9. Sweeney expressed satisfaction with the company’s overall performance, emphasizing their commitment to achieving a combined ratio goal of 95% by the end of 2025.
In terms of revenue, Liberty Mutual saw a 7.4% decrease in net written premiums (NWP) for its U.S. Retail Markets, which includes personal lines and small commercial insurance. The NWP fell to about $6.1 billion. A notable factor in this decline was a nearly 16% drop in private passenger automobile NWP, which amounted to about $2.6 billion. The company attributed this decline to an increase in policyholders shopping around for better rates. On a brighter note, the homeowners insurance segment remained stable, with NWP holding steady at $1.8 billion.
Liberty Mutual’s Global Risk Solutions business, however, experienced growth, with NWP rising by 7.5% to approximately $4.7 billion. Earlier this year, the company announced plans to phase out the Safeco brand, consolidating all personal lines products under the Liberty Mutual name. This move is part of their strategy to streamline operations and enhance brand recognition.
As Liberty Mutual continues to adapt to market changes and pursue profitable growth, the company remains focused on overcoming the challenges posed by natural disasters and competitive pressures in the insurance industry.